1951-11-29

COMMITTEES OF THE HOUSE


[Stage Direction]
Mr. J. A. Bradetle (Cochrane) presented the first report of the standing committee on external affairs, and moved that the report be concurred in.
Motion agreed to.


[Stage Direction]
Mr. David A. Croll (Spadina) presented the first report of the special committee on defence expenditures, and moved that the report be concurred in.
Motion agreed to.


[Stage Direction]
Third report of special committee on the Dominion Elections Act, 1938, and amendments thereto.-Mr. Fulford.


Mr. W. G. Weir (Porlage-Neepawa) moved:: That the name of Mr. Low be substituted for that of Mr. Johnston on the select standing committee on public accounts.
That the name of Mr. Wylie be substituted for that of Mr. Johnston on the select standing committee on industrial relations.


[Stage Direction]
Motion agreed to.


Hon. F. G. Bradley (Secretary of State) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to amend the Dominion Elections Act to implement the recommendations of the special committee appointed to study the Dominion Elections Act, 1938, embodied in the draft bill prepared by the said committee and inter alia to make provision for: (a) a greater number of advance polls: and (b) the Canadian prisoners of war voting regulations, 1951.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


Frederick Gordon Bradley: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Civil Service Act in respect of the tenure of office and salaries of the commissioners.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


Hon. Stuart S. Garson (Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Supreme Court Act to provide an increase in the maximum salary of the registrar from eight thousand to eight thousand five hundred dollars.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


Stuart Sinclair Garson: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Exchequer Court Act to provide an increase in the maximum salary of the registrar from six thousand five hundred to seven thousand five hundred dollars.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.
1428	HOUSE OF
Inquiries of the Ministry METEOROLOGICAL SERVICES

[Stage Direction]
On the orders of the day:
Mr. A. H. Jeffery (London):: Has the minister given consideration to the establishment of a weather station at or near the city of London and, if not, will he do so?


Hon. Lionel Chevrier (Minister of Transport):: I thank the hon. member for having sent me notice of his question. The Department of Transport already has a fully-equipped weather observation station at the London airport which takes weather observations each hour. The department has no plans for the establishment of any additional weather observation facilities at London.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: Will the Minister of National Health and Welfare make available through the post offices a supply of the forms necessary to institute a search of census records by applicants for old age pensions?


Hon. Paul Martin (Minister of National Health and Welfare):: My hon. friend will appreciate that the matter of census is not within the jurisdiction of the Minister of National Health and Welfare and consequently the question will be referred to the Department of Trade and Commerce and the Post Office Department. Possibly my hon. friend is under a slight misconception. The census is only one of the many ways of proving age. It is by no means an absolute method of proof, as we are finding out. However, the problem is not as considerable as the hon. member may possibly think because the number of applicants still to make application is remarkably low and the processing of applications is being done with remarkable speed.



EMERGENCY GOLD MINING ASSISTANCE ACT


[Stage Direction]
On the orders of the day:
Mr. Rodney Adamson (York West):: should like to direct a question to the Minister of Mines and Technical Surveys. I have not been able to give notice and therefore he may take it as notice. Are new regulations under the Emergency Gold Mining Assistance Act under consideration and will they likely be introduced this session?


Hon. George Prudham (Minister of Mines and Technical Surveys):: No new plans have yet been discussed but it is expected that by the end of the year there will be an announcement of government policy.



ROYAL CANADIAN NAVY


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: When will the parliamentary assistant to the Minister of National Defence make a statement concerning Surgeon Lieutenant Joseph C. Cyr which he promised to make two days ago.


Mr. J. A. Blanchette (Parliamentary Assistant to the Minister of National Defence):: I feel quite certain that a statement will be made tomorrow.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllraith (Parliamentary Assistant to the Minister of Trade and Commerce):: Yesterday the hon. member for Rosetown-Biggar asked the following question:
Is the report correct that the government has ordered two jet-powered Comet airliners from the de Havilland company of England? If so, why was this aircraft preferred over the Avro jetliner developed by A. V. Roe Canada Limited with substantial government assistance? Have any orders been received for this Avro jetliner?
The answer to the first part of the question is "yes". In reply to the second part may I say that the Comet is the only jet transport in production and service at this time anywhere in the world. The purchase of these airliners will bring to Canada the latest developments in jet transport aircraft, as the Comet has been under development and test in service for the past five years. The answer to the third part of the question is "no."


Mr. M. J. Coldwell (Roselown-Biggar):: In
view of the large expenditures that have been made by the Canadian company when is it expected that craft will be coming from that company?


George James McIlraith: There seems to be a little misunderstanding. The Canadian jetliner is a prototype and could not be put into service until it has been further developed. The two types of jetliners are not comparable. The one is a transport jetliner with a long range while the other is a short-range aircraft.
[Mr. Garson.l


INQUIRY AS TO TREATMENT OF RETURNING VETERANS ON TROOPSHIP "j. P. MARTINEZ"
On the orders of the day:


Mr. R. O. Campney (Parliamentary Assistant to the Minister of National Defence):: On
Tuesday the hon. member for Peterborough West (Mr. Fraser) asked the following question:
Has the Department of National Defence investigated the charge appearing in the press of yesterday that Canadian veterans of the Korean war returning to Canada on the troopship J. P. Martinez were allowed only two meals a day-very small ones at that-and were also made to paint the ship?
I took that question as notice and upon making inquiry I find that a party of Canadian soldiers were returned from Korea on the United States army troopship J. P. Martinez along with a larger number of United States troops. There were approximately 1,700 troops on board which rather taxed the messing capacity. Upon a few occasions the midday meal was not served and upon other occasions it was only a light lunch. The ship was travelling under service conditions and at all times there was adequate food of first-class quality and everybody was well fed. None of the troops was made to paint the ship, but investigation indicates that a few of the men who wanted something to do volunteered to do some painting.



RAILWAY ACT


[Stage Direction]
The house resumed, from Tuesday, November 27, consideration in committee of Bill No. 12, to amend the Railway Act-Mr. Chevrier-Mr. Dion in the chair.
On section 1-Reappointment.
Lionel Chevrier: I should like to answer the questions asked the other evening by the hon. member for Royal concerning the appointment of the various members of the board of transport commissioners. The chief commissioner, Hon. Mr. Justice Kearney, was appointed on November 1, 1951. The assistant chief commissioner, Mr. Hugh Wardrope, was appointed on November 8, 1948. That was a reappointment. The deputy chief commissioner, Mr. Armand Sylvestre, was appointed on April 18, 1945. Mr. Commissioner MacPherson was reappointed on the 21st of September, 1949, and Mr. Howard B. Chase was appointed on July 28, 1948.


Mr. Macdonnell (Greenwood):: I want to say a word on clause 1. When the special
Railway Act
committee on railway legislation met the other day, counsel for the two railways appeared before it but counsel for the Canadian National when called upon spoke in part as follows:
According to my instructions I am to say that in principle the Canadian National Railways have no objection to these bills, and have no representations to make with respect to them at this point.
I think it is correct to say that that attitude was persisted in throughout. The point I want to raise is that in the Canadian National we have a great public corporation. We are told, and I think we accept the statement, that it is allowed to run its own operations, and that it is an independent corporation in a very real sense of the term. We know that government ownership has certain implications but nevertheless the other situation is very real. Questions are asked in the house, the minister very properly says those are questions for the railway, and we accept that. It seems to me a very strange thing that in a matter of this kind, which surely is one of the most important things facing the management of that railway, when the railway comes before the special committee which is dealing with a question of great difficulty and complexity concerning which the committee certainly needs all the assistance it can get, then, as they call it in the army, we have a nil return from counsel for the railway.
I should like to point out that after all this railway is presided over by a man greatly esteemed in this country for his ability. He has held public positions before, and certainly no matter what other comments were made of him at that time it was never a point of criticism that he did not have his own views and could not express them. Now, however, the railway says nothing. I point out that what that really means is that the senior officials and management of over 100,000 men who are employees of this railway-I think that is the correct number-had nothing to say at all on this tremendously important question when it was before the special committee. That does not seem to me in accordance with my understanding of what should be the situation on the Canadian National Railways. I understand it is a practice that has been followed in the past and maybe it has been sanctioned to whatever extent sanction comes through practice. However, I raise the matter now very earnestly. I should like to quote one or two comments from a previous debate to show the views of two distinguished parliamentarians of that time. I refer to 1927 when I believe the Canadian National Railways Act was passed. Mr. Dunning was then minister

Railway Act
of railways, and I should like to quote a short sentence from his remarks merely to show the relationship between him as minister and the then president of the railways, Sir Henry Thornton. I quote it merely to show the relationship of independence together with mutual co-operation. At page 193 of Hansard for February 10, 1927, he said, speaking of Sir Henry Thornton:
As minister and president of the system, respectively, we often have very wide differences of opinion on matters which it is Sir Henry's business to place before me at times.
I only read that to show that at that time the president of the railway had a very independent position which was recognized by the minister in the frank manner of the passage I have just read. I should like to read from the same page a statement made by Mr. R. B. Bennett, as he was then, speaking about the directorate of the railway. He said:
They should be businessmen of capacity, able and willing to assist the president of the system in the conduct of its operations.
I do not need to labour the point further. I think I have made the point I want to make. It seems to me that we can only draw one inference. What is the situation? We have a man well known to be a man of ability and energy at the head of this great enterprise. We have this enterprise concerned in a discussion regarding freight rates than which there can be nothing more important for them. Their whole life blood depends on it. Nevertheless the representative of the railway stands up and says: "According to my instructions I am to say that in principle the Canadian National Railways have no objection". The inference there is-and if I am wrong I shall of course be corrected-that, however free the railway may be in other matters to carry on their business, and I think they are largely free, in this matter of great importance they really are in the position expressed by the words of their counsel. He of course is speaking for the management of the railway but I suggest that the words he used are really words which we must assume the president himself would have had to use if he had been present. In other words, I think we must assume that the railway was not free in this matter. I submit that is a great disadvantage. It means, apart from anything else, that these tens of thousands of men who work for the railway are deprived of the expression of their views through their senior officials, and it means that the committee, when dealing with a matter of infinite complexity and importance, was deprived of the assistance of these able men.


Lionel Chevrier: I should like to be allowed to reply to the suggestion of the hon. member for Greenwood. The inference he draws from

the statement made by counsel for the Canadian National Railways before the committee is that there may have been some dictation on the part of the minister or the government with reference to the conduct of the Canadian National Railways. I want to assure him at once that there was no interference or dictation either by the minister or by the government in so far as the attitude of the Canadian National Railways is concerned, and for more than one reason there need be no surprise at the attitude of that railway. The first is that under the practice which has arisen before the board of transport commissioners it is the Canadian Pacific that is the yardstick for the fixing of rates, and therefore it was only natural that they who bear the brunt of presenting evidence before the board of transport commissioners should also be responsible in large part for submitting evidence to the committee. I think that is clearly established by the practice before the board of transport commissioners itself.
Let me assure my hon. friend on another point. After the report of the royal commission had been handed down and the president of the Canadian National Railways had had an opportunity to give it some study, he came to see me and discussed it with me. He told me frankly then that he was in full agreement with the substance and the principles of the legislation as it was then envisaged. Therefore there should be no surprise when counsel for the Canadian National Railways declares that in principle he is in favour of this legislation.


James MacKerras Macdonnell: I want to make only one comment, if I may. I am aware of what the minister said about the Canadian Pacific Railway being the yardstick, but that does not seem to answer the point. Even if the Canadian Pacific Railway is the yardstick, it is very unfortunate that no assistance whatever came from the Canadian National, but I am not going to pursue the matter further.


Mr. Gillis:: Since I was a member of the committee I feel it is my duty to say a few words on this first section. I might say that on the question of freight rates I went into the committee in much the same state of mind as the average member of that committee, namely, pretty well confused and mixed up on the whole question. I wish to say that I had my mind clarified on many things that had been rather mysterious to me previously, particularly the language used when discussing the whole problem of freight rates. I wish to say also that it was one of the best committees I have sat on since I came to this house. It was an education to me at least. I say it was a good

committee for three reasons. I think the people who serve on other committees should insist on the same kind of administration as far as their committees are concerned. In the first place, there was the patience of the chairman. I have never seen a chairman with more patience.


Lionel Chevrier: I wish that applied to the minister.


Clarence Gillis: I will say something in a minute about him. In the second place, there was the calibre of the witnesses who came before the committee. Every witness on behalf of the provinces and the Canadian Pacific Railway knew exactly what he wanted. They were clear and explicit about it. If you had any doubt in your mind that you were trying to resolve they certainly cleared it up for you. All the witnesses who appeared before the committee were very able people. They gave us a valuable education in the mysteries of rate-making as it exists across the country, and the importance of the board of transport commissioners. The patience of the chairman, the ability of the witnesses and the flexibility of the minister were outstanding.


Mr. Knowles:: You asked for it.


Clarence Gillis: Any time a matter came up that was not strictly in accordance with the bill, if there was any suggestion that there was something wrong with it or that it created a hardship, the minister was very flexible. He took it under consideration. The fact that the bill was amended in about six different places shows that he was not stuck on a sentence. The committee was fortunate in the calibre of the people it had to handle the problem and present it to us.
The members of the committee were conscientious. I would like to pay tribute to the hon. member for Vancouver-Quadra. While we may not agree with him in everything, nobody can doubt his sincerity, honesty and tenacity of purpose. He took a beating in the committee, and he is taking a beating in the house. But my sympathies are with him. I think that any person who is trying to do something honestly deserves the commendation of his fellow men.
Now, in regard to what was accomplished. It is not hard to rise in the house and criticize, and I am very good at that myself. This whole question of freight rates was handled by a royal commission. That royal commission dealt with the whole question for around eighteen months. A witness for the Canadian Pacific Railway said that he made 105 appearances before the commission. After hearing all the evidence and giving everybody across the country an opportunity
Railway Act
to present their case, the royal commission sifted the mass of evidence, and this bill was the result. This bill is intended to implement the recommendations made by the different provinces and the railways and put it on the statute books. I myself think that a good job was done on it in many respects.
As far as the maritimes are concerned, they did not get under this bill, but they did get a guarantee that they were not going to lose anything. The historic position of the maritimes was guaranteed. While some of us had some doubts whether it was sufficiently guaranteed in the bill, the minister, again in his own flexible way, said: We will write something in that gives you a second guarantee. So far as the historic position is concerned, we are guaranteed we are not going to lose anything. The rebate of 20 per cent is guaranteed to the maritime provinces.
I want to say on behalf of the end of the country that I come from: Thanks to the other provinces. From British Columbia to Newfoundland they all agreed that that particular right guaranteed to the maritimes should be maintained. It was a very generous gesture on their part, in view of the very many complex problems they have in their own provinces in this matter of freight rates.
Another reason why the maritimes were treated fairly was the fact that the presentation on behalf of the maritimes was a united [DOT]one. The whole four provinces were represented in the maritime commission, with capable people at the head of it. Their job is continuously to sift rates, groupings and what have you, and to represent the maritimes before the board of transport commissioners. In my opinion they did a good job, and it is a demonstration of united action. We are grateful that while we did not get anything, we did not lose anything. The bill does not prevent us from getting redress from any inequities that we think still exist.
So far as the maritimes are concerned, I want to say that as a member of the committee I was quite satisfied, and the maritime representatives had their own commission acquiesce in the amendments in the bill, and they felt they had sufficient guarantees.
On the question of equalization, I am convinced that equalization of freight rates in this country is a dream. What the bill intends to do, rather than equalize in the strict sense of the word, is to remove discriminations where they exist, and to bring about equality in so far as it is practicable in this country. The bill has laid a good base for that. There are sections of the country

Railway Act
that still have a complaint, but I do not think there is anything in the bill that prevents a redress of any wrong that may exist now if it has not been taken care of completely in the bill.
There was one place where I was disappointed. A few moments ago the hon. member for Greenwood said he did not think the Canadian National Railways took the proper position. I think they did, in that the Canadian Pacific Railway has always been recognized as the rate-making section for the railways in Canada, as the minister stated, and whatever yardstick is laid down for them in so far as rates are concerned is applicable to the whole system. The Canadian Pacific Railway representative is a very able person. He was very vocal in the committee. There was never any doubt in anybody's mind as to what he thought on any particular section of the bill.
In this respect I think the railways took a position that any sensible organization would take, recognizing that the fellow with the big stick is in there, and if he can get a good job done it is applicable to me.
Therefore, why should I send a lot of representatives in there? The point I was disappointed in is this. The legislation does not recognize at all the representation of the Canadian National Railways to the commission on the proposition of a revision of the capital structure of that railway.
I am concerned about the employees of that road, just as the hon. member for Greenwood has indicated he is. I believe the largest single factor preventing the employees of the Canadian National from getting proper redress in the matter of wages and conditions is the capital structure of the railway itself. As the hon. member knows, that railway is carrying an interest debt of around $45 million a year on fixed capital which produces nothing. Many years ago this capital should have been put into bankruptcy. The president of the Canadian National recommended that that capital should be either written off or written into the balance sheets as equity capital and not interest bearing. There is $45 million a year which goes to maintain the national railway which should not be there. We should have done something at this session about this interest debt which is carried year by year.
I did not intend to make a lengthy speech. I happened to be a member of the committee representing a part of the country that I think got a fair deal, and I was there to

protect the interests of that part of the country. I thought I should say these few words to express my appreciation.


Mr. Low:: I was a member of the committee until the last few days of the sittings. At that time I had to be away, and my place was taken by another member. As a member of the committee, I believe I should say a few words in connection with this bill, and especially since I come from a province that for many years has been attempting to get just such an arrangement as has been presented in the bill. We want it understood, Mr. Chairman, that on the whole we think the members of the committee have been very fair. Like the hon. member who has just spoken, we appreciate the attitude of the chairman of the committee, and the minister. We feel they both did a very fine job in that they did not allow themselves or the committee to be swerved from the terms of reference. All the members of the committee settled down to their task with commendable studiousness and energy. While we disagreed in some measure with some of the members of the committee, we appreciated the view that they took.
I should like to say a word about the hon. member for Vancouver-Quadra. No one appreciates his good qualities more than I do. I believe he is a very courageous man, and he has shown that on numerous occasions in this house and on other committees. We differ in our opinions, certainly, but I can quite understand why he took the position he did, especially on section 332B which I think was the subject of most of his attention during part of the sittings. I quite understand that if the west coast really were in danger of losing the transcontinental rates, the hon. member for Vancouver-Quadra was quite justified in putting up a fight. I would not like to see that happen. In fact I would feel towards the possible loss of the transcontinental rates for the west coast as I felt when British Columbia made an application for the removal of the mountain differential. At that time we in Alberta recognized that the removal of the mountain differential might throw some additional burden upon the freight payers in the province of Alberta. We felt, however, that British Columbia was completely justified in requesting the removal, so we did not fight against it. However that may be, I just wanted it known that we appreciate the position of the British Columbia members too. I believe it was the hon. member for Vancouver South who spoke the other day, and took a sound position so far

as his point of view was concerned. He took a well-balanced and very fair position, and I want to pay that tribute to him.
We in the province of Alberta did not get everything for which we asked, but under the circumstances I believe we -are justified in saying that we are fortunate in what we did get. I want that known, because we feel quite thankful for what we believe the bill provides. Personally, I cannot feel very critioal about it at all. I should like to see the bill given every chance to show what it can do for all the provinces. Certainly I believe the minister, if the experience over the next three or four years proved there are deficiencies in the bill, would be the first to recommend that -changes be made in order to ensure fairness for all parts of this country. Certainly the equalization principle established in the bill is something for which we can all be thankful.
The provinces of Ontario and Quebec have not shown too much concern about the matter, which I interpret to mean they are prepared to take their chances with the rest of Canada. If they had fought section 331 in committee, perhaps I might not have the same opinion. They did not, however, and one has to interpret these things pretty much on the attitude of the members in committee. I would say that they took -a fair stand in committee, and they are not fighting it in the house today. They are not fighting the equalization principle nor are they fighting section 332B, which sets out the one and one-third formula. This seems to be evidence that they are prepared to go along without making an issue of something that will probably be of benefit to the whole of Canada; that is the only way I can interpret it. I am quite prepared, Mr. Chairman, to attribute that attitude to them on the basis of what I have seen and heard.
As the days go by I believe the hon. member for Vancouver-Quadra and perhaps some others from British Columbia will find their fears were not justified. A careful study of the evidence and statements presented in the committee, especially by Mr. Knowles who was the adviser to the committee, will indicate that the transcontinental rates are not maintained so much on the basis of water competition today as they are on the basis of United States railway competition. That being the case, I doubt very much whether the railways will, in your time or mine, consider taking off those transcontinental rates. I cannot bring myself to believe there is any danger of that at all. If there is, then of course Alberta stands to lose some of the benefits that -are contained in section 332B,
Railway Act
because if the basis of the one and one-third formula is raised then of course it will result in higher rates. My own feeling is that the evidence clearly shows there is little if any danger the railways will abolish those rates.
I do not want to make a lengthy speech. I merely want to express our appreciation of the very fair way the committee was conducted. To the railways I should like to say this. We thought, at times, the Canadian Pacific Railway spokesman was vigorous, but that is wh-at he was there for. He submitted himself to cross-questioning quite -amiably and tried to give, to the best of his ability, answers to the questions that were asked of him. On behalf of the people of the province of Alberta, Mr. Chairman, I want to say how much we appreciate the effort that is now being m-ade to remove what we have thought have been historic injustices and to bring relief from the terribly heavy burden of freight costs under which those people have suffered for so many years.


Mr. Brooks:: I have little to say, Mr. Chairman. As a matter of fact, I did not intend to say anything but I feel that I should, in a way, rather second the remarks which have been made by the hon. member for Cape Breton South. Like him, I appreciate greatly the situation as far as the maritimes are concerned. I also realize how little we know about freight rates. The hon. member said that he had learned a great deal. I feel that I learned much as well. I also feel that even yet I know little about freight rates across Canada, and I doubt whether anyone can say that he knows the whole story.


Solon Earl Low: To do that would take us many years.


Alfred Johnson Brooks: I think so, when it is
remembered that freight rates are based on so many factors such as geography, competition with trucks, and competition with canals; we also speak about ocean competition; and there are statutes such as the Maritimes Freight Rates Act, the Crowsnest Pass agreement, the mountain differential, and United States freight rates. All of these things which have to be taken into consideration impressed us with the great difficulty of fixing freight rates on our transportation system in Canada.
We in the maritimes were greatly concerned as to what would happen to us when this bill was passed. I was not in the house when the resolution wa-s before it, but my good friends the hon. member for Cumberland and the hon. member for Annapolis-Kings expressed doubts at that time as to whether our interests were safeguarded. I think their fears were justified because when the representatives from the maritimes,

Railway Act
representing the maritime transport commission, appeared before the committee they emphasized the dangers there were in passing the bill as it was presented to the committee. I was pleased indeed that, while the minister did not entirely agree with them, he was nevertheless far enough convinced to allow an amendment to go through. I feel that that amendment has cleared the air. As I say, it has justified the fears which were expressed in this chamber by the hon. member for Cumberland and the hon. member for Anna-polis-Kings. As my good friend the hon. member for Cape Breton South has said, we appreciate the support which was received from all parts of Canada. I might also say that we in the maritimes greatly appreciate the efforts of Mr. Rand Matheson and Mr. Frank Smith, the men who appeared before the committee for the maritime board of trade and commission. They presented our case in a splendid manner, so that when representatives of other parts of Canada came to express their views on the requests that we were making, it was found that they felt that our views were entirely justified, and that the stand that the maritime provinces were taking was entirely justified. Along with the hon. member who spoke a few moments ago, 1 wish to thank the other sections of Canada who realized so well the position of the maritime provinces. I think it is a great indication of the solidarity of this country in certain matters and also of a true Canadian spirit from one end of Canada to the other.
The other night the hon. member for Bow River-and 1 may say that I think perhaps he was not altogether serious-accused our party of taking sides in the committee between different provinces. That is absolutely incorrect, as I am sure was proven to him. I for one had an open mind. As I stated then, while I was in sympathy with my good friend the hon. member for Vancouver-Quadra personally, nevertheless I was not entirely in sympathy with his arguments. My sympathies were more or less with the province of Alberta. The hon. member for Bow River thought that possibly I should have taken more part in the debate in defence of Alberta's attitude. But with the hon. member for Peace River and the hon. member for Bow River being on that committee, upholding the rights of the province of Alberta, I felt-as I am sure did every other member of the committee-that there was no necessity for anybody else to put in his oar.


Solon Earl Low: We liked your attitude.


Alfred Johnson Brooks: I am sure you did. I have nothing further to say at this time, Mr. Chairman. X hope that this bill will be a

success. I hope that it will be fair to the railways and to every section of Canada.


Mr. Murray (Cariboo):: The bill has been carefully worked out and is worthy of all the praise which has been given it. At the same time, coming as I do from a certain part of Canada where railway service is not adequately given to the people, I am sure that my community would be unhappy if I did not say at this time that, now that this great national plan has been worked out, we hope that the Canadian National Railways and the Canadian Pacific Railway, which jointly own the Northern Alberta railways up in my part of the country, will at an early date be instructed to proceed with the extension of certain rail construction in that area.
When the royal commission on transportation met I was authorized by the boards of trade .and chambers of commerce of the district, along with Senator Gray Turgeon, to appear before it and to present the claims for the Peace River block of British Columbia and that part of the hinterland of Vancouver north of Prince George, for adequate railway service. In the report of the royal commission, at page 20, it is noted that we duly appeared before the commission and that a brief of many pages was submitted.


The Chairman:: Order. I am sorry to
interrupt the hon. member but its seems to me that he is not quite in order in discussing that matter at the present time.


George Matheson Murray: Mr. Chairman, I
sought to approach the question of freight rates in that particular province in which, I think any expert will agree, they are higher than they are elsewhere in Canada, simply because 10,000 people in that area are removed from rail service. The hon. member for Peace River was quite right in the position that he took. But as my neighbour out there, he knows that there are at least 30,000 people out there whose natural outlet is the port of Vancouver but who are not enabled to ship their material to the port of Vancouver and who must ship it 500 miles to Edmonton, and around back from Calgary or elsewhere, in order to reach the port of Vancouver. If I am out of order in referring to that matter, I hope that at an early date I may be given the opportunity of referring to what is a national problem in our country, and particularly in the city of Vancouver which is today deprived of direct access to its natural farm hinterland.
Freight rates on grain have been fixed from Dawson Creek to the head of the lakes and to the port of Vancouver, and certain concessions have been made. Nevertheless the merchants and manufacturers of British

Columbia are interested in a cheaper schedule of rates from the great industrial centres to that particular area. That is something which probably breaks the harmony of the occasion. But, as I say, a very extensive brief was placed before the royal commission. Pages 130 and 131 of that document are devoted to the proposed railway expansion, and matters incidental thereto, and to the economic position of the Peace river and Pacific regions.
I shall not read from the report at this time. It is a matter of record, and the material may at a later time be brought before the proper authorities. In urging these remedies for that area, I think it is only good business for all concerned, because in extending the rail services there it must be kept in mind that a very large tonnage already exists. It is urgent that the matter should be considered at this time, because that country is going to come into its own as a highly productive country. With coal, oil, lumber, agricultural products and the like, the matter of freight costs is of paramount importance and a public issue of first magnitude.


Mr. Blackmore:: Mr. Chairman, as I have watched developments since the setting up of the royal commission in 1948, I have found much cause for happiness. It seemed to me like the realization of a dream.
In 1937, the second year in which I was in the House of Commons, I made a number of remarks bearing upon the inequities suffered at that time by the prairie provinces. Among others, I referred to the railway freight rates situation, and used the following words recorded on pages 52 and 53 of Hansard of that year:
Now there is another injustice of which I believe a good many people are not aware. I am going to speak for a minute or two directly for my own province, not mentioning the others. There is in the Dominion of Canada a freight rate structure that makes Alberta pay both going and coming. She is being discriminated against as is no other province in this dominion.
And at a later point in the same speech:
I wager that if the people of some of these eastern provinces were suffering as much as Alberta is they would not be as calm as Alberta has been. The thing we want to do is to find what is the cause of all this, and to remove that cause as far as is humanly possible. Surely there is something that can be done. I read this from an editorial in a western paper, and not a Social Credit paper:
"This province (Alberta) as a matter of fact is at the apex of the general freight rate structure of Canada."
I have not time to go into details, but they bear tremendously on the relief problem in those provinces. Someone is suffering for all that. And it does not matter how desirous they are of working or how careful they are in their living or how economical they are or how anxious to keep off relief, they are in the grip of circumstances which are an absolute disgrace to this dominion.
There are some other things which I wish to consider. I will not now spend any more time on 94699-92
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the discrimination; I may at another time say something further on that for the enlightenment of the house. I fancy the reason these things are tolerated is only that we do not know about them. I did not know about these things until I looked-them up, and I cannot blame people who have never had them brought to their attention. It is our business to bring them to the attention of hon. members, and we do so in a spirit of good fellowship and straightforward honesty, asking that redress be given to us so that we may live. That is all. You see why I said a moment ago that the matter is exceedingly serious.
From that time forward, until the appointment of the commission, I missed no suitable opportunity to bring to the attention of other members of the house and of other provinces of the dominion the outrageously unjust position in which Alberta was placed by the freight rate situation.
I rejoice in the finding of the commission; I rejoice in the bill that has been brought down; I rejoice in hearing about the way the minister deported himself all through the sittings of the committee, and about the way the different committee members deported themselves.
I should like to make a few observations on the whole situation. One of the bright lights, in my judgment, is the provision of the $7 million subsidy to take care of the millstone about the neck of Canada in the form of that wilderness of rocks which separates Ontario from the prairie provinces. I do not know why it was that something like that $7 million was not provided many, many years ago. I do not see how it could be that men, around the year 1900, and from there on, failed to realize that calling upon the prairie provinces and upon British Columbia to bear the full burden of the futile daily haul across those thousands of miles was an outrage not to be contemplated with equanimity by members of parliament and by the provinces. Nevertheless that outrage has been contemplated and has been inflicted upon those four western provinces every year since the railways were built.
I believe other things are being overlooked, just as were those thousands of miles of rock. Until we give cognizance to those other things we shall never place Canada in a position where she can accomplish her maximum by way of well-being for Canadians.
I should like to commend the hon. member for Vancouver South for the views he expressed the other evening. In my opinion they were genuinely statesmanlike. His general attitude was that we should approach this whole matter with calmness and a realization of the facts, and that we should try to do something about it that would be an honour to us in our generation. I believe I have correctly summarized what the hon.

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member said, but if he feels I have been unjust, then he may make the correction.
But, applying that general principle, let me draw to the attention of hon. members once again the fact mentioned by the hon. member for Vancouver South. Trucks and busses are now cutting into a great deal of the most profitable business of the railroads, and that is entirely as it should be. What is the use of living in an age in which we have wonderful machines, if the people cannot obtain benefit from those machines?
In addition to that, the top layer of business of the railways is being taken off by the aeroplanes. Our own Trans-Canada Air Lines, as well as other air transportation companies, are doing the job-and rightly so. Once again, why in an age of splendid machines should we not profit through the use of those machines? While we recognize that those particular machines at both ends of the business are taking off the cream of the transportation business, we expect the railroads to be able to make a success of their undertaking with what is left. We expect those people who must use the railroads to bear the whole brunt of their maintenance. How can men in this House of Commons be more neglectful of their duty than to disregard that important fact?
There are those in the dominion who believe that trucks and busses should be brought under central control and forced to discontinue competition with the railroads. Could there be a more fantastic attitude to take toward machines than to put them in a position where they cannot fulfil their purpose? If we had tried back in the horse and wagon days when busses and trucks began to come into use to bring them under control and make them unable to compete successfully with the wagons and horses-, what a nonsensical situation that would have been! No one would fail to recognize the tragic absurdity of such a position. Yet the like of that is practically what we are meditating when we entertain the notion of limiting truck and bus competition with railroads.
Our whole idea seems to be that come what will these railroads must be able to raise enough money from the traffic they carry to discharge their responsibilities and commitments and make a go of their organizations. We simply must once more recognize, as we have now done in the case of the wilderness of rocks, that with this rapid development of impinging transport industries a factor is brought into being which must be provided for, not by the poor unfortunate people who still have to use the railroads but by the whole Dominion of Canada.

We must have the railroads and they must be in the best of condition when we need them sorely -as in time of war or when our crops must be moved to the sea. But that does not mean that the people using the railroads should have to pay the whole shot. It is a national advantage and a national necessity that these railroads be in perfect running order, adequately equipped with personnel and rolling stock so that they will be able to serve us in time of need. Why should we as a nation not pay for that great facility just as we pay for the construction of airports or for military preparedness? It is just part of the cost of keeping ourselves able to meet the exigencies of the future.
I feel almost certain that before too long men will recognize that the only way of meeting this equalization problem and at the same time enabling the railroads to carry on is an adequate subsidy paid out of the consolidated revenue fund by all the people of Canada. I sympathize intensely with the people of British Columbia. I quite understand the attitude of the hon. member for Vancouver-Quadra and I honour him for the courage that he has manifested. He feels that British Columbia is in danger of losing the few crumbs of advantage she already has. I know something about the disadvantages under which British Columbia is labouring. Life is not all meadows and sunshine there, not by any means. She is enduring a freight rates structure which is almost as unhappy for her as is the freight rates structure which the maritimes must still endure, even with the bit of patching done to their situation.
If we want Canada to make her fitting contribution to the well-being of the world we simply must not put parts of Canada in a position where they are burdened down and prevented from making their contribution Everywhere we are having impressed upon us at the present time the tremendous need of increasing the production of food for the world. If I am correctly informed, only yesterday Dr. Barton gave a talk over the air from Rome in which he pointed out the tremendous need of increasing food production.
Let it be borne in mind that one of the greatest potential areas on the face of the earth for the production of food is Canada. Let it be borne in mind that if we inflict upon our people a burden of freight rates so great that they are unable to produce fully and profitably and market their products we shall be preventing Canada from doing the thing which perhaps is the most important for her to do in this critical time of world history. Each and every freight rates increase

which has occurred in the last few years has made it more difficult to produce and market butter and all kinds of dairy products, all kinds of poultry and meat products, and practically every product produced in Canada. It has made it more difficult to have a farm which is near submarginal and make it pay.
If we are worthy of the position we occupy in this house we will take cognizance of that fact and adopt every measure to see to it that every possible producer in Canada is, as far as is practicable, put in the position where he can do the best he is capable of doing to build up the productive capacity of Canada to the optimum degree.
Let me say once more that a subsidy to be paid out of the consolidated revenue fund will have to be resorted to if we are going to have fair rates, or I would say tolerable rates, in this nation. I shall close by once more congratulating the minister upon the position he has taken in the committee and elsewhere in respect to this bill. I think that is an achievement which will redound to his credit all through future times and I do not think I am speaking extravagantly when I say that.
Before I resume my seat however let me say that we must not assume that the railroad fixture we have planned for today is our ultimate goal. We have merely won one or two trenches and everybody must start immediately to determine how we are going to win the next trench and consolidate those we have won already. I think it was the hon. member for Vancouver South who pointed out that in five years we shall probably have to have a new set-up. I think that is true. We cannot have that set-up by just letting the railroads and their employees struggle along until they get to the point where they feel that they simply must have additional freight rates, then to continue with the hit and miss, chaotic system of the past for the next ten or fifteen years until another royal commission will have to be appointed. We must go at this matter in a sensible way, appreciating the difficulties with which these people are confronted, and making provision for the remedying of the difficulties before they become acute.


Mr. Macdonald (Edmonton East):: As one of
the members who served on the special committee on railway legislation, I feel that at this stage I should make a few observations. Like other members who served on the committee 1 should like to state that I never served on a more interesting committee, or one before which more qualified witnesses appeared or where the chairman gave more 94699-925
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consideration to everyone concerned in studying the legislation. I believe that the railways of Canada are perhaps more important than those of any other nation, for without railways this country could not exist. I have been an employee of one of the railways for over thirty years, and I appreciate that railways must have revenues to exist.
There is nothing in this legislation that is going to do away with railway earnings. As a matter of fact I believe that the procedure outlined in these amendments to the Railway Act will result in a more equal distribution throughout Canada of the collection of freight rates from those sources from which the railways obtain their revenue. I am not anxious to prolong the enactment of this legislation. For that reason I take the opportunity on this section to speak about two matters in the bill that are of particular interest. I refer first to the new section 332B found in section 7 of the bill. This section is of great importance to the people of Alberta, and is not only important for the beneficial change it makes in the rate structure. After forty years of discrimination in the Canadian freight rate structure this section removes what almost might be described as a festering sore in the economy of our whole province. Shortly stated, that discrimination permitted the railways to charge more, much more in some important instances, to Edmonton and Calgary for transportation of goods from eastern Canada than was charged to Vancouver, 771 miles farther.
It is a fundamental rule in transportation that you cannot charge more for a shorter than for a longer distance, other things of course being equal, and the rate comparison I have cited was a striking violation of that principle. The railways justified the violation by pointing out that there was water competition from eastern Canada to Vancouver which did not exist at Edmonton and Calgary. However, the people of Alberta were not long in finding out that on transcontinental traffic in the United States no such discrimination was permitted owing to the combined effect of the railway law of the United States and the rulings of the interstate commerce commission. Since 1922 it has been laid down that the rate to interior points in the United States must not exceed the rate to west coast destina-ions. For example, if the rate from Cleveland to San Francisco was $1.50 the rate from Cleveland to Salt Lake City was $1.50 and no more.
The Alberta people submitted this grievance to the general investigation of the board of railway commissioners in 1927 and no relief was given. The discrimination was left as it was. The matter was then placed before the

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Rowell-Sirois royal commission in 1938. I believe that the report of that commission, while lending a sympathetic ear, said that it was a matter for the board of transport commissioners and that it probably warranted investigation. Then came the royal commission on transportation set up by this government in December, 1948, with broad and unrestricted terms of reference. Again the people of Alberta were given an opportunity to seek redress of this old wrong. A case was submitted to the royal commission on the long and short haul principle and their complaint with respect thereto. The royal commission recommended a solution for this serious discrimination, and I am glad to compliment the government, and particularly the Minister of Transport, for having faithfully reproduced in the bill the recommendations made by the royal commission.
The recommendation of the royal commission does not give intermediate destinations the full and complete relief from long and short haul discrimination which is enjoyed by the people of Idaho, Washington and Utah, but what it does do, as expressed in the bill, is to provide that the people of Alberta will pay the rate to the west coast plus 33$ per cent. However, at this time, we are content with that seemingly unfair treatment. We recognize, as the royal commission did, that this has been a controversial matter and the good people of Alberta are satisfied to compromise and accept less than was sought with a view to maintaining harmony.
To illustrate the discrimination existing at [DOT]the present time, and which the bill will remedy, I might give the house one example, the movement of canned goods, which is an important one. The story is told at page 101 of the royal commission's report. The rate shown there has since been increased, and I will give the existing rates. The present rate on canned goods from eastern Canada to Vancouver is $1.57. The rate to Edmonton is $3.23, but I must point out that by use of what is called the Vancouver combination the rate on very large carloads can become $2.97. By combining the rate of $1.57 to Vancouver with the back haul rate of $1.40 from Vancouver to Edmonton you can get a rate of $2.97. This so-called privilege is extended so as to obviate the necessity of actually hauling to Vancouver and back to Edmonton.
Applying the remedy recommended by the royal commission, namely, that the rate to the intermediate point must not be more than one and one-third times the coast rate, our rate to Edmonton will become $2.09. From what I have said hon. members will readily realize that I am giving my wholehearted support to the bill in the belief that in so far

as Alberta is concerned it is one of the most beneficial pieces of legislation that have ever come before the attention of this house.


Mr. Decore:: Although I was not a member of the special committee on railway legislation, inasmuch as I come from the province of Alberta I should like to make a few observations. I believe one of the greatest steps toward national unity in this great country of ours is the introduction of this measure by the minister, a measure based on some of the recommendations of the royal commission on transportation. Rarely, if over, have the western provinces since joining confederation been in a position to win so notable a victory. There is no question that there has been unjust and unfair discrimination concerning freight rates especially in the western provinces and particularly the province of Alberta. We of course realize the difficulties of railway transportation in a country like Canada. It is a country which has thousands of miles between the Atlantic and the Pacific, with mountains and barren territory in between. Let us also not forget that we have in Canada a population of only some 14 million people, a very small population, considering the intricate and vast system of rail transportation that we have here. The cost is obviously very high to the people.
Rail transportation is the life stream of the economy of any country. In Canada it is not only that life stream of our national economy, but it is also a very important factor in national unity. Therefore it is a matter of national concern, and it is important that the burden of rail transportation should be, and must be, on a more equitable basis.
The reason I rose was to make this observation and to bring out the fact that this great victory for the west, and particularly for the province of Alberta, as a result of the Tur-geon report, would hardly have been possible had it not been for the silent acquiescence of the provinces of Ontario and Quebec. I understand that neither of these provinces that has the benefits of the freight rates as they have existed up until now appeared before the Turgeon commission. Probably the Turgeon commission report would have been different had they appeared. I assume that if representations had been made by the provinces of Ontario and Quebec they would have tried to continue the unjust discrimination in their favour. But this they did not do, and we in the west most certainly appreciate the attitude of these two provinces, and especially the attitude taken by the hon. members from these provinces. I think to a great extent this will eliminate the bitterness which sometimes existed in the

west toward Ontario and Quebec. I believe this is a great step in strengthening national unity in this country.


Clarence Gillis: Before we proceed with the bill may I say that the royal commission devoted twenty-one pages of its report to the recapitalization of the Canadian National Railways, and it set out some formulae. I am not going to make a long argument on this, but I am in favour of what the royal commission said in their report. For example, there is the psychological factor as it applies to the Canadian National Railways in this accumulation of deficits. The commission definitely states that the Canadian National Railways did prove conclusively that their case was good in so far as an adjustment in their fixed charges was concerned. While the bill does not do anything specifically about it, is it the intention of the board of transport commissioners and the minister's department to study further the recommendations of the commission in regard to a revision of the capital structure of the Canadian National Railways?


Lionel Chevrier: The answer to that question is yes. I think I have indicated that a committee is studying it now. I am sure my hon. friend will realize that it is a matter of some importance, and one that takes time to consider, just as it has taken a considerable amount of time to consider this legislation. But it could not possibly be in this bill. It would have to be a separate amendment, or perhaps another bill along the lines of the Canadian National Railways capital revision act, which was brought before this house some time ago. I can assure my hon. friend that it is under active consideration at the moment.


Howard Charles Green: I want to bring one question to the attention of the minister. Before doing so I should like to thank the hon. member for Cape Breton South and the leader of the Social Credit party, the hon. member for Peace River, and also his colleague, the hon. member for Lethbridge, for the kind remarks about myself. These three members and I have been friends ever since we first met here in the House of Commons, and perhaps we see each other through rose-tinted spectacles. However, I should like to reciprocate their kind expressions.
The matter I wanted to raise with the minister is the question of policy with regard to future appointments to the board of transport commissioners. A vacancy has existed for some time now, and I presume a new commissioner will be appointed in due course. I think the minister should pay close attention to the recommendations made by the Turgeon commission, which advocated strengthening the commission. If he will turn to page 272
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he will find there under the heading "Assessment of the Suggestions", which means suggestions made by the various provincial representatives before the royal commission, the following paragraph:
It can be stated fairly that what everyone really wants is that the board's powers be kept as they are now, but with the hope and expectation that the recent contentious proceedings which have gone on will cause the board to exercise greater care in the future in arriving at its decisions.
Further on in the same chapter we find the recommendation of the commission for strengthening the board. It is couched in very tactful language, but I do not think anyone can doubt what is meant. I suggest to the minister that, in making new appointments, it is of vital importance that the main consideration be the qualifications of the appointees. There is not going to be much improvement in the board of transport commissioners if the first qualification is that of having been a Liberal member of parliament, a Liberal member of a legislature or a defeated candidate. I hope that I would express the same sentiments if a Conservative government were in office at the present time. No doubt when one was in office it committed similar indiscretions; but we have come to the stage now in this transportation question in Canada when it is absolutely vital that the selections be made on a new basis. I hesitate to make this comment, but in the interests of the country I think it should be made.


Lionel Chevrier: I thank the hon. member for the suggestion which he has made. In view of the discussion which has taken place here and in view of the various recommendations, I think it is timely. I think, too, that the government has had that very strongly before it in the last recommendations. Certainly it cannot be said that what the hon. member suggested was in the government's mind with regard to the appointment of Mr. Justice Archibald.


Howard Charles Green: That is true.


Lionel Chevrier: He was, and I am sure the committee will agree, an outstanding candidate for that position. Unfortunately his health broke down. I think that goes for the present incumbent. I have known him for some years but more intimately within the last few weeks, and I am very strongly impressed by the force of character and by the intellectual powers of Mr. Justice Kearney, the present chief commissioner. Because of his qualifications I have no doubt that he will be a success as chief commissioner. It is certainly the intention of the government to make sure that any appointments in the future will be along the same line. It is certainly my intention to so recommend

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to the government. But I would like my hon. friend to be reminded of this. There are some former Liberal candidates, elected and defeated, who are outstanding men. I would not want to have them ruled out just because they happen to be of that political persuasion. I do not mean to say they should be appointed because of that. Certainly those who have been appointed thus far were not regarded in that light.


Howard Charles Green: That is open to question.


Lionel Chevrier: I would not want my hon. friend to think that I am making this reservation because we intend to appoint a former Liberal member or a defeated Liberal candidate to the next vacancy. That has not even entered my mind nor the mind of the government, because we have not given it consideration yet. But again I want to assure the house and my hon. friend that it is certainly the intention of the government, and it has been in the last few years, to carry out the recommendations of the royal commission in so far as qualifications are concerned.


Mr. McLure:: I do not want to make any extended remarks. When this matter was being considered the other evening I was anxious to ascertain what the powers of this board were, and the jurisdiction which it has. After I made a few remarks the other night I received a telephone message saying that I had been quite severe in what I said. So far as the railway problems in our province are concerned, I believe this board has always acted as a buffer between the Minister of Transport and the people who are looking for railway service.
In delivering judgment a few weeks ago on a railway problem in our province, the board disagreed amongst themselves and the chairman wrote a minority report which was based on certain reliable facts. As could be seen from the portion I quoted the other night, the remainder of the board put in a childish report. Whether or not we are getting the right class of man on this board, I do not know. Surely with this increase in salary we will get high-class men from the educational point of view. Still it is no use getting these high-class men if this board is, as it appears to me, just a buffer arrangement for the government when we make certain demands on the government. As I said before, according to the terms of confederation my province is compelled to deal directly with the government, and for that reason I would not favour these increases in salary until we see if we cannot get good men to serve. I should like to find out what the powers and jurisdiction of the board are.


Lionel Chevrier: The powers of the board are set out in sections 32 and 33 of the Railway Act, principally section 33. The royal commission on transportation recommended that the powers be not broadened.


[Stage Direction]
Section agreed to.
Section 2 to 6 inclusive agreed to.
On section 7.
Howard Charles Green: Section 7 is the section which contains the most important part of the bill. I would suggest that we consider this section clause by clause as those clauses will appear in the Railway Act itself. We could take section 328 of the Railway Act first, and so on through section 7 of the bill. It might be wise to consider one or two sections together during the discussion, but I think we would have a more orderly debate if we took it according to sections of the Railway Act.


The Deputy Chairman:: Hon. members have heard the suggestion. Is that suggestion agreeable?


Some hon. Members:: Agreed.
On section 7-section 328-Division of freight tariffs.


Howard Charles Green: Section 328 of the act deals with the new division of freight tariffs, dividing them into class rates, commodity rates, competitive rates and special arrangement tariffs. I have today received from the city of Victoria and the Victoria chamber of commerce a brief which refers apparently to the class rates. It sets out that after the mountain differential was removed on July 1, 1949, the railways discontinued a practice which had been carried on for many decades, namely that the rates to Victoria were practically the same as the rates to Vancouver. In other words there was what we might call a grouping of Victoria and Vancouver for the purpose of these class rates.
The mountain differential, of course, was very unpopular in British Columbia, and was extremely unfair because it set a higher rate for that province than for any other part of Canada including the prairies. I do not understand why, when it had been the policy of the railways to put Victoria on this basis, that policy was changed. I would ask the minister if there is not some way in which the problem can be met. No doubt he has had the same letter and brief that I have received. I believe it was sent to each of the British Columbia members. There does seem to be a need for some action to remedy that situation. Victoria is handicapped in any event by reason of the water trip from the mainland to the island. I do not think she should be further handicapped by having to pay these higher rates.


Lionel Chevrier: Mr. Chairman, in answer to my hon. friend's statement, may I say that I do not think section 328 of the act deals with that point. There is nothing in it, in my opinion, which could come to the rescue of these aggrieved people. When the province of British Columbia made its application for the removal of the mountain differential some time ago, I presume that there were placed before the board the handicaps and difficulties under which the area suffered because of the differences in the rate in the mountains as compared with the prairies. I would think that the remedy would lie with the board, in that an application should be made to the board by the persons aggrieved to have their original position restored. Since the board was seized of the whole question of the mountain differential, if something arose out of that judgment then I think it is for the board to determine.


Howard Charles Green: Apparently it does not arise out of the mountain differential. The position was that while these mountain differential rates were in effect, the rate to Victoria was practically the same as that to Vancouver. When the mountain differential was wiped out, then the railways put on the additional rate to Victoria. As I read the brief and the letter, it is a class rate and I should think the difficulty could be overcome by putting Vancouver and Victoria in the same group. I suppose that would be under the new section 332A. It has nothing to do with the mountain differential other than that when the railways lost revenue from the mountain differential being wiped out, they apparently decided to get more from Victoria by charging them a higher class rate than they had been charging, in comparison with the rate charged to Vancouver.


Lionel Chevrier: Yes, but that arises out of the position in the mountain differential. What the railways did was this. They simply did what they were entitled to do. They put Victoria on its proper mileage vis-a-vis Vancouver. That perhaps put the chief complainants in the position in which they find themselves today. But I think my hon. friend will find that there is in the Railway Act at this time ample provision for redress. I do not know what the section is-I think it is either section 314 or 315-under which any party aggrieved can make application to the board for redress.


Howard Charles Green: Would that redress be in the nature of making a bigger group; of putting Vancouver and Victoria in the same group?


Lionel Chevrier: I think it could be of that nature, and I think it could be in the nature of a general complaint.
Section 7-section 328-agreed t.n
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On section 7-section 329-What class rate tariff to specify.


Howard Charles Green: Will the minister explain that amendment? Also, as we come to other sections which have been amended, I would ask him to explain the effect of the amendments which have been made in committee.


Lionel Chevrier: This is a rather difficult amendment to explain. My hon. friend will recall that the same question was asked of me in the committee, and that I stated that it was an amendment of a technical nature which our officers thought should be included in the section. What was proposed before was this:
Class rate tariffs (b) may, in addition, specify class rates between specified points on the railway which rates may be higher or lower than the rates specified under paragraph (a).
Then it was thought advisable by our experts to amend that so that the section would read:
Class rate tariffs
(b) may, in addition, specify class rates between specified points on the railway and when such rates are established in groups the rates between the groups may be higher or lower than the rates specified under paragraph (a).
I understand that under these standard mileage freight tariffs-a copy of which was filed-articles move in groups. The intention here is that where such rates are established for groups the rate between the groups may be higher or lower than specified in (a). Beyond that, I am afraid I cannot help the committee. It is a highly technical matter. If my hon. friend insists too much, I am frank to admit that I may not be able to explain it because it is a technical matter.


Mr. Argue:: May I ask this question. Is it a further exemption to the equalization section? If the railways may specify class rates between specified points on the railway and when such rates are established in groups the rates between the groups may be higher or lower than the rates specified under paragraph (a), it would seem to me that that is an exception.


Lionel Chevrier: No, it is not. The exceptions to equalization are set out in section 332A. Those are the only exceptions and there are no others.


Howard Charles Green: On that point, Mr. Chairman,
I have also been puzzled. The minister will remember that Mr. Evans, vice-president of the Canadian Pacific Railway, told the committee that 41-1 per cent of the traffic carried on that railway came under the exceptions in section 332A. But then he went on to say that, of the balance, 18-5 per cent of the freight was under class rates, which of course would be covered by the new equalization nrovision; 15 per cent was on mileage

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commodity rates; but the remaining 25-4 per cent was on what he called point-to-point rates. In the committee he was questioned by the minister with regard to these point-to-point rates and gave this reply as reported at the top of page 59 of the minutes of proceedings and evidence of the committee:


Mr. Evans:: Put it this way. I believe you can
equalize class rates.
That, of course, would be 18-5 per cent of their freight traffic.
I believe you can equalize commodity rates, rates that I call commodity mileage rates, which are a general application of the tariff rate.
That would be the 15 per cent.
I do not believe you can equalize specific point-to-point commodity rates because they are put in to meet local conditions and local industry, and if you try to equalize them you are going to disturb a lot of industries whose rates are made for particular purposes, and I do not think you should attempt to equalize those rates; and I think that is why this bill specifically points to the equalization of the class rates and the commodity mileage rates and leaves the other rates in a general category for the jurisdiction of the board; because if you start equalizing all these specific point-to-point rates then you are in a hodge-podge that is going to overlook the reason why these rates were established.
From that explanation I took it, in reading over the evidence this morning, that in addition to the 41-1 per cent of the C.P.R. freight traffic which would not come under the national freight rates policy, there would also be this 25-4 per cent made up of point-to-point rates. I wonder if I am right in that assumption?


Lionel Chevrier: I think our expert witness
indicated that equalization could not take place in so far as the exceptions in section 332A were concerned but that in so far as the rest were concerned, equalization was possible. While it is true that Mr. Evans made the statement which he made, in crossexamination of him I thought I had obtained from him an admission that so far as the remainder-59 per cent-of the traffic was concerned, it was possible to obtain equalization. Certainly I think that is the case. As to at least some of the exceptions that are enumerated in section 332A, it is possible to have equalization; equalization already exists. It is the view of our experts that equalization is possible in many, if not all, of the point-to-point rates. They disagree with the view of Mr. Evans in that respect.


Howard Charles Green: 1 do not think the minister
obtained that statement or that evidence from the witness. I shall proceed to read the next question following that statement I read a few moments ago.


Lionel Chevrier: So with the exception of these point-to-point commodity rates you think it is possible to equalize commodity rates under this bill?


Charles Robert Evans: I do, sir, and we are in favour of it.


Mr. Browne:: What percentage of these rates
would be point-to-point rates?


Charles Robert Evans: I wish I could tell you. All the
division that we have got is the division between the class rates, the commodity rates and the competitive. I do not think there is an analysis that goes deep enough to differentiate between the commodity rates and the point-to-point rates.
Then the minister will notice that as reported at the end of the page he asked the question again. But that did mot bring out any answer to the effect that the point-to-point rates could be equalized. I would think, from Mr. Evans' explanation as to what these point-to-point rates are, that it would be doubtful whether they could be equalized to the same extent as class rates and commodity mileage rates.


Lionel Chevrier: It is the opinion of our advisers that many of the point-to-point commodity rates can be equalized.
Section 7-section 329-agreed to.
On section 7-section 330-Tariffs to be filed and published.


Howard Charles Green: Could we have an explanation of the amendment to section 330?


Albert Frederick Macdonald: Mr. Chairman, the Canadian Pacific Railway proposed an amendment to the subsection as originally drawn. This proposal was intended to protect the railway against claims by shippers, in courts, for reparations, that is to say, from damage claims against the railways that the rates charged were not just and reasonable. The amendment offered by the railway to give it that protection provided that as soon as the rates were filed with the board of transport commissioners they would be deemed conclusively to be just and reasonable. That proposal was objectionable, and I protested it. It might very well have proved to be an insurmountable barrier to a shipper seeking disallowance of a rate, as is frequently sought, on the ground of unjust and unreasonable. In any event the suggested amendment went far beyond protecting the railway against reparations claims. The amendment adopted by the special committee protects against such claims without interfering with the right of the shipper to go before the board seeking a disallowance of an unjust and unreasonable rate.


Lionel Chevrier: In answer to the question asked, might I point out that section 330 may be divided into several parts. Subsection 1 provides for the filing and publication of the tariffs, and the notice of cancellation of any tariff. Subsection 2, which was amended at the request of the committee, contains a clause which provides for the giving of at least three days notice where a tariff is reduced.

Subsection 3 makes provision for the giving of thirty days notice where a tariff is increased. Subsection 4 deals with competitive tariffs, and subsection 5 with the effective dates of the tariffs.
Section 7-section 330-agreed to.
On section 7-section 331-Filing of competitive tariffs.


Howard Charles Green: Would there be any objection to considering sections 331 and 332B together? Section 331 lays down the general rules with regard to competitive tariffs, while section 332B deals also with one type of competitive tariff. Would there be any objection?


Lionel Chevrier: I would like to accommodate the hon. member, but I am sorry I cannot because these are two different matters. One deals with conditions required of the railways when they file a competitive tariff; and while it is true that the transcontinental rate is a competitive rate, I feel the two should be taken separately. I hope my hon. friend will not insist.
I believe there would be no objection to his referring to section 331 when he is dealing with section 332B. Certainly I would not try to stop him. If he wishes to make his argument along that line, I think he should have the advantage of referring to the earlier section.


Howard Charles Green: That is what I had in mind. In discussing section 332B I hope to suggest that the difficulty which is sought to be overcome by that section might more properly be handled by an amendment to section 331. If I am free to refer back to the earlier section, I shall have no objection.


Lionel Chevrier: I can see no objection to referring back; but I hope my hon. friend will not insist upon having section 331 stand.
Section 7-section 331-agreed to.
On section 7-section 332-Burden of proof.


Howard Charles Green: Would the minister explain that?


Lionel Chevrier: The change in section 332 was inserted to meet the request of the Canadian Pacific Railway. I think it was the intention not only in the report of the royal commission but also in the whole statute dealing with the establishment of tariffs that competitive rates should remain as they were prior to the passage of this measure. The words "other than a competitive rate" had been omitted in the drafting of this section, and it was felt in fairness to the railways that there should be no interference with the competitive rate tariff. Those several words, "other than a competitive rate" were inserted in the section.
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Howard Charles Green: Will the effect of the section, as amended in committee, be as follows: The section without the amendment provided that when anyone filed objection with the board against an advance in a freight rate tariff, the burden of proof justifying the increase rested with the company. In other words the company had to justify the increase. As the section was originally introduced, there was no mention of competitive tariffs. Now this amendment takes the competitive tariffs out of the provisions of the section, with the result that in the case of a competitive tariff a railway can raise that tariff and does not have the onus of proving that the increase was justifiable. Is that correct?


Lionel Chevrier: I do not think it takes the competitive rate out. The competitive rate wording simply was not there, and it leaves the section exactly the way it was before in that respect. A further definition is given.


Howard Charles Green: No; as the bill was introduced into the house, when any rate was advanced by a railway the railway had to justify that advance. In other words the onus of proof, or as it is called the burden of proof, was on the railway. That of course would include competitive rates, because originally they were not exempted in this section. The amendment introduced in committee takes the competitive rates away from that provision, and provides that there will be no onus on the railway to justify increasing competitive rates?


Lionel Chevrier: In effect that is so.


Hazen Robert Argue: I wish to make a comment on that language in 329(b). The view of the counsel for Saskatchewan, and I believe counsel for other provinces, has been that competitive rates in the past have been lowered and for that reason there has been great disparity. I think the amendment is a good thing in that it will allow the railways greater facility in raising competitive rates. Certainly if competitive rates are raised, the difference between the freight rates in one section of the country as compared with those in another will be lessened. I believe this is a good section.
Section 7-section 332-agreed to.
On section	7-section 332A-National
freight rates policy.


Howard Charles Green: Will the minister explain the amendment to this section?


Lionel Chevrier: The amendment is in subparagraph (f), which reads:
Rates applicable to movements of freight traffic upon or over all or any of the lines of railway collectively designated as the "eastern lines" in the Maritime Freight Rates Act as amended by the Statute Law Amendment (Newfoundland) Act.
1444

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As the committee knows, the recommendation of the royal commission made it quite clear that there should be no interference with the principle of the Maritime Freight Rates Act. It was certainly my understanding that there was no such inference in the recommendations of the commission. Furthermore I expressed the same opinion in this house, that the maritime freight rates preference was not affected in any way.
However, both the representative of the maritime transportation commission and counsel for the maritime provinces took the view that for greater security these words should be inserted. The other provinces were of the opinion that as it then stood the bill was sufficient to protect the position of the maritimes, but they said they had no serious objection to the insertion of these words. The words were inserted and accepted by the committee, and are now in the bill. To my mind those words simply give greater protection to the preference, or to the position of the maritime provinces. I am sure the committee was delighted to consent to the introduction of this subsection if it eased the minds of hon. members from the maritime provinces. From the outset it was the intention that there should be no interference with the statutory rights of the maritimes, and I think this additional paragraph (f) makes it clear beyond doubt.


Alfred Johnson Brooks: Mr. Chairman, I should like to make a few remarks in connection with this. As I said when I was speaking on the first section, we from the maritime provinces appreciated the attitude of the committee and of all parts of Canada toward our great problem. However, I would not like this committee to get the impression that those who are representing the maritime provinces and the maritime transportation commission were asking for something they did not think was really necessary. They presented a long brief to the committee; and it will be remembered that while the minister was quite definite in his statement that the Maritime Freight Rates Act was protected, there was something beyond the Maritime Freight Rates Act that Mr. Matheson and Mr. Smith, representing the maritime transportation commission and the province, felt should be protected. I refer to what is known as the maritime freight rates structure.
The maritime freight rates structure consists of our rights under the Maritime Freight Rates Act, certain arbitrary groups of rates, and our rights under the old Intercolonial railway. That is what we wanted protected and that is what we feel is being protected under this amendment, but which was not being protected under the bill as it then stood. I think I could best indicate to the

house the attitude taken in the committee by reading from the proceedings of the special committee, at page 110, where the chairman asked this question:
Have you any reason to believe that the same board of transport commissioners will not follow the same practice in the future when there is no legislative authority directing them to change it?
Mr. Smith pointedly replied:
Our fear, if I may put it so, Mr. Chairman, is that there is a declaration of policy. Now, either that policy means something or it means nothing, and if it means what we think it does-and I do submit as a lawyer of some experience that it is clearly susceptible of that interpretation-there is, in my opinion, as I think, to use an expression of the honourable the minister, a directive to the board to put into effect a policy. Now, what is that policy?
The policy is, as I understand it, that there be uniform systems of freight rates in Canada.
Mr. Smith then goes on to quote the first subsection of section 332A which reads:
It is hereby declared to be the national freight rates policy that, subject to the exceptions specified in subsection four, every railway company shall, so far as is reasonably possible, in respect of all freight traffic of the same description, and carried on or upon the like kind of cars or conveyances passing over all lines or routes of the company in Canada, charge tolls to all persons at the same rate, whether by weight, mileage or otherwise.
Mr. Smith then goes on:
And now, Mr. Chairman, as I see it that is a general directive; and then, it is true, the next subsection is permissive, the word "may" being used; and it provides that "The board may with a view to implementing the national freight rates policy, require any railway company."
And now, that is an over-riding obligation, as I see it, to bind the board to effect a national freight rates policy. And now. what are they to do? They are
(a) to establish a uniform scale of mileage class rates applicable on its system in Canada, such rates to be expressed in blocks or groups, the blocks or groups to include relatively greater distances for the longer than for the shorter hauls.
Mr. Smith's contention was that there was this general directive under the act which would override the permissive clauses. I simply mention these matters to show that I feel there was justification in the argument of both Mr. Smith and Mr. Matheson, that their arguments were not unnecessary as I think the minister is now stating and as he stated in the committee. Mr. Smith continued at page 111 as follows:
I do submit, Mr. Chairman, that the authority and jurisdiction of the board is so circumscribed and limited by this declaration of policy that we will have to have something in there for our protection.
I have tried to give the background of that need of protection. As I said previously, we in the maritimes appreciate the action of the committee and the minister, but we feel also that both Mr. Matheson and Mr. Smith and the maritime transportation commission

were justified in presenting their brief to the committee. I do not think the minister wishes to belittle their action but I would not like it to be understood in this committee that the action taken by Mr. Matheson and Mr. Smith was not necessary as perhaps the minister might lead us to believe.


Hazen Robert Argue: Mr. Chairman, as I have said already, I believe this equalization section is the most important in the bill, and I am most anxious that it be fully implemented as quickly as possible. I think the minister will agree that if there is any undue delay in bringing about equalization it will destroy much of the benefit provided by this bill. I am wondering if the minister is able to tell the committee what is the goal of the government, the period in which equalization may be brought about. When the minister and the government were drafting this section they must have had some time objective in view, because if no effort were made to bring about equalization in a reasonable time this bill would be of little value. I wonder if the minister could tell us approximately how long it will take to make this section operative.


Lionel Chevrier: I think it is rather difficult to answer my hon. friend's question with any degree of assurance. I am sure my hon. friend realizes that this section, as well as all other sections having to do with rates, is one for the guidance of the board of transport commissioners. They and not the government fix freight rates. They are the ones who grant either increases or decreases from time to time, and they are the ones who will put this equalization section into effect. Under P.C. 1487 they have been instructed to carry on an investigation of the freight rate structure, and the royal commission on transportation hoped that investigation together with this bill would be very helpful in bringing about a plan of equalization. I can only say what the experts have said in the committee, namely, that it is a matter of some time.
In the United States, for instance, it took the interstate commerce commission twelve years to equalize rates, and I am reminded that was only class rates and not commodity and other rates. It has been given in evidence that it will take anywhere from three to five years to do the job in Canada, and I am sure the board, in view of the discussions that have taken place in this committee, will want to get on with the job as quickly as possible.


Hazen Robert Argue: I hope the board will want to get on with this matter as quickly as possible. I appreciate the fact that the minister cannot say with any degree of accuracy how long equalization may take, but I am wondering 94699-93J
Railway Act
whether the minister would agree with the evidence given by Mr. Knowles that a period of five years might be the time required. All I should like is some target, whatever assurance the minister can give me as to the time it will take to bring about equalization. Will the minister agree that five years is a reasonable time, that we may have some reasonable expectation that at the end of five years all or almost all of the rates will be equalized?


Lionel Chevrier: If it will help my hon. friend I will be pleased to repeat here what our experts think-and I have to base my opinion on their advice, particularly in a matter of this kind-namely, that it would take about five years before a plan of equalization would be complete.
Section 7-section 332A-agreed to.
On section 7-section 332B-Definitions.


Mr. Laing:: This is the one section of the bill that has been of considerable concern to members from the province of British Columbia. The calibre of debate has been sufficiently high on this subject that I am not going to say anything that will lower it. The people of British Columbia do not want any amendment made in the bill at the expense of any other part of Canada. We have not built up what we have in that province today by enforcing harsher conditions on any other part of Canada, and we do not intend to do so in the future. However, what we are particularly concerned about in this section is that the transcontinental rates are the ones upon which is to be founded the entire intention of the section and the most important part of it, namely that in the intermediate territory the rate that shall apply from the eastern territory to the western territory or from the western territory to the eastern territory shall not be greater to any point than one and one-third the competitive transcontinental rate.
Our excellent friends from Alberta are delighted with this legislation, and I can understand their delight when for many years they have been paying rates which were sometimes two and a half to three times the transcontinental rate. To have relief proffered in the form of an over-all rate to all intermediate points not greater than one and one-third the transcontinental rate is a most engaging prospect. However, I should like to draw their attention to this point, and I should like the minister to make some comment concerning it. Members from Alberta must remember that the one and one-third rate is dependent entirely upon the maintenance of the transcontinental competitive rate. We and the representatives employed by the

Railway Act
province of British Columbia to appear before the committee were of the opinion at one time that we could include something in the section which would ensure that the transcontinental competitive rates would apply, but we are told that by the very nature of competitive rates such an amendment cannot be included.
Therefore we are concerned with this section which endeavours to spell out the meaning of the national policy to bring relief to a great part of the prairie provinces, because in order to bring that relief we must have maintenance of the transcontinental rates. If I may revert to section 332A, we were inclined to believe that there was adequate provision under subsection 3 of that section, which reads as follows:
The board may disallow any tariff or any portion thereof that it considers to be contrary to the national freight rates policy, and may require the company, within a prescribed time, to substitute a tariff satisfactory to the board in lieu thereof, or may prescribe other tolls in lieu of the tolls so disallowed.
We thought that was ample provision. Many people who gave evidence-and this was also indicated in many briefs sent to us-indicated that they thought the freight rate structure could suffer if it were made too rigid, that after all the board of transport commissioners had to make decisions in these matters and that as much leeway as possible should be given to them. I suggest that subsection 3 of section 332A gives all the leeway in the world to the board of transport commissioners to provide a satisfactory rate in any direction for any commodity. But in order to pinpoint national policy as it may affect the prairie provinces it is proposed to include this one and one-third provision based upon the transcontinental rate. It comes to us repeatedly that relief for the prairie provinces is founded completely upon maintenance of the transcontinental rates.
We had some evidence on the part of the railways to this effect: Well, if you do not have the transcontinental rates we will put in a low commodity rate that will not hurt you too much. That evidence is to be found on page 211 of the proceedings of the committee. The witness, Mr. Knowles, suggested that such a low commodity rate would not be too high either. Our only point is that we are interested in the maintenance of the transcontinental rates. We want to point out that the relief for the prairie provinces which is proffered in the substance and the spirit of this bill is dependent upon the maintenance of the transcontinental rates, and we are further advised that we cannot include an amendment to maintain those rates. That is
[Mr. Laing.l
why we took the stand we did in the committee, and I would much prefer to see 332B dropped entirely.


Mr. Churchill:: It must be evident by now that there is a weakness in section 33 2B, which deals with the transcontinental rates and the imposition thereon of what we have been calling the one and one-third rule. When you look back over the meetings of the special committee, and when you look at the debate in this committee so far in connection with this bill, it is a strange thing that most of the sections have gone through, both in the special committee and here, without any great delay; but when you come to section 332B you find a very sharp difference of opinion, and that difference of opinion is absolutely non-partisan. In view of the nature of our country it happens to be sectional.
What is wrong with section 332B that it has aroused this difference of opinion? I submit for the attention of the committee that section 332B, based as it is on a recommendation of the royal commission, has not back of it the same weight of opinion that we find with regard to other recommendations of the royal commission. We have been told of the number of meetings that the royal commission had, and of the opportunities afforded all interested parties to make representations. Over a period of a year and a half the royal commission investigated all these problems; and it is only reasonable to expect that when there has been complete investigation, when every party interested has made his statement, a finding of a royal commission should receive due consideration. I think that with respect to other parts of this particular bill due weight has been given to the recommendations of the royal commission. But here, in so far as I can discover, and based on the statements made by the official representatives of the province of Manitoba and of the city of Winnipeg who appeared before the special committee, this particular finding of the royal commission did not have back of it the complete evidence that is back of other findings. Just let me read what counsel for the province of Manitoba said when he appeared before the special committee:
The recommendation of the Turgeon royal commission (p. 100 of the report) on which the section is presumably based, was not advocated by any person or organization appearing before the commission. The railways did not suggest it as sound from a rate-making point of view. The provinces and other interested groups did not suggest it as sound from either a rate-making or economic point of view. In short, the suggested 1} rule is entirely arbitrary in character, unsupported by any representation before the Turgeon commission.

In other words, had Manitoba then been aware that this one and one-third rule was going to be a finding of the commission, that province would have made a detailed study of the matter and would have made an effective presentation. I presume that British Columbia would have done the same thing, and the other provinces entering into it. Then what would we have had? We would have had a deliberate study on the part of the royal commission of the effects of that particular rule, and then a finding; and based on that finding, legislation. Had that happened, we would not have been in the same position in the special committee nor here in the committee of the whole. We might have raised an objection, whatever the finding would have been, but naturally the objections would not carry as much weight as I suggest the objections that have been put forward so far do carry.
I have put before the committee of the whole for its consideration the point of view of the province of Manitoba, the city of Winnipeg and the Winnipeg chamber of commerce. This point of view is a serious and considered one. The people who presented the briefs to our special committee were men who have been concerned with and engaged for a long time in the study of freight rates. They had competent economic advisers and men who were able to give them adequate advice on the freight rates problem, and I think their point of view deserves very careful consideration. In fact I thought that at the meeting of our special committee the point of view against 332B in its present form was rather completely set forth, and I entertained the hope at the time that some modifications would be introduced, just as in other aspects of the bill we have had certain modifications brought in. However, that did not happen, so we have reached this stage where it is necessary to put the position of Manitoba before the committee of the whole so the committee will have a full understanding of our objection to this section.
As the brief for Manitoba represented, Manitoba states that a violation of the general principles of the bill has occurred. This bill is aimed generally at equalization, and this method of dealing with the transcontinental rate involves something that is not equalization. At the bottom of page 125 of the report the royal commission points out that equalization is not going to be obtained very quickly; that is, some study must be made of the problem, and the report says:
Undoubtedly many serious problems are involved, for example the effect that the proposals may have on railway revenues, on established industries and on trade and market patterns. All of these things
Railway Act
are matters of the utmost importance. Having regard to the large number of rate changes which will be involved, the problem is one peculiarly for the board to resolve finally after the general freight rate investigation and after all parties who may be affected by the proposals have had an opportunity of being heard.
Well, no one can find fault with that suggestion in the report. Surely it is a reasonable and sane way to put into effect any alteration in the freight rate structure. If that were done in connection with this particular proposal in 332B, the position of Manitoba and the city of Winnipeg would be that there could be no objection. If the board were empowered, before putting it into operation, to investigate its effect, if any, on established industries and on trade and market patterns, we could scarcely raise objection, but there seems to be no opportunity for doing that. It is going to be written into the statute and may be applied immediately, and in our opinion Manitoba will not benefit thereby; or at least, if there is some benefit thereby, Manitoba's competitive position will be endangered to some extent.
Just to summarize the point of view of the Manitoba government let me read just one paragraph from the brief presented before the special committee:
We think that section 332B is wrong both in principle and in practice, because it would give to a restricted area a special low rate which is hot justified by the competitive tests of section 331 or by the national freight rates policy of equalization as set out in section 332A.
The effect would inevitably be to reduce railway revenue in that area below the level which is reasonable and proper under an equalized rate structure, with the result that other areas would be called upon to pay slightly higher rates to make up the necessary revenue.
Then on the next page there are two sentences I should like to quote:
The disturbance of existing and long-established competitive positions of businesses in the various centres of western Canada.
This would result from the application of this rule.
The distortion of a sound set of principles laid down in sections 329, 331 and 332A by the special concession to a particular area on a particular type of traffic as set out in 332B.
The city of Winnipeg presented a similar point of view. It all comes down to this. We are of the opinion that there will be an adverse effect on Manitoba's industrial development, particularly in respect of steel products. We in Manitoba sometimes feel that people are not aware of the extent of the industrialization of the province. My argument is based on the effect of section 332B of the Railway Act on our industrialization.

Railway Act
Without enlarging upon it to the fullest extent, I want to say a word about Manitoba's industrial development. It has been proceeding at a very satisfactory rate during the last few years. We take a considerable interest and pride in that fact. Anyone who is interested in getting a more complete picture may refer to the Toronto Saturday Night of November 24, 1951. On page 23 there is a useful article by Mr. Carlyle Allison concerning Manitoba's industrial development, and the introductory sentence is in rather forceful language. It reads:
It is a sore point in Manitoba that eastern Canada-and particularly Ottawa-still regards the keystone province as primarily agricultural . . .
Manitoba has a thoroughly developed agricultural economy which has been the backbone of the province for a great many years. At the same time we are developing an industrial side, the extent of which can be seen in this article. The whole point of my argument is that when you have an industrial development the freight rate structure becomes just as important to that section of your economy as the freight rate structure is to the movement of your agricultural products.
I quote again from this article in Saturday Night:
The total value of all farm production in Manitoba in 1950 was $298,952,000; the gross value of manufactured goods produced in Manitoba in 1950 was estimated at $525 million.
Just to complete the industrial picture, since the beginning of world war II the number of manufacturing firms grew from 1,000 to more than 1,600, and their employees from 24,000 to 43,000. In 1951 alone 25 per cent of die province's manufacturers extended their plant facilities. It is because of the development of Manitoba's industry that we are so concerned about any alteration in the freight rate structure which may adversely affect that industry. Our industry is not located solely in the city of Winnipeg and suburbs. Brandon, Portage and other places in Manitoba are gradually taking part in this industrial development and will similarly be affected.
As I said, steel seems to be the product which is most likely to be affected by this rule in section 332B. By checking through the Winnipeg telephone directory I found that there were twenty-four firms advertising themselves as producers or fabricators of iron or steel. In the Canada Year Book I discovered that 10,000 people are employed in industries that have to do with iron and steel. Many of these people are employed in the railway shops, but through correspondence with Winnipeg I have

discovered that there are certainly 5,000 employees who are directly employed in these various industries I have mentioned. A new plant for the fabrication of steel has just been erected at a cost of half a million dollars. I have mentioned that steel fabrication is an important part of Manitoba's industrial production, and if her competitive position in that field is endangered, as is suggested by this brief, our hope is that some attention will be paid to the matter and our position restored, or else assurance given that the board of transport commissioners will go slowly in making any change which will adversely affect our industry.
It is an interesting investigation to consider the interrelation of the economy of the western provinces and the trade that flows between these provinces. It is not to our advantage if any of the western provinces are weakened in any way. It is not to the advantage of any of the other western provinces if Manitoba is weakened in any way. As I mentioned yesterday I am sympathetic towards the point of view of the province of Alberta, and I hope that province will be sympathetic towards the point of view of Manitoba. With the development of Manitoba and the subsequent increase of population, there will be a market for Alberta products. We have not the advantages of coal or oil, and consequently each year we import from Alberta 600,000 tons of coal and an estimated 6 million barrels of oil. It is a large and growing interprovincial commerce, and the maintenance of Manitoba's industries means the development of Manitoba's population and the consequent greater dependence upon the provinces of the west.
In conclusion I suggest that the proposal put forward in the brief of the city of Winnipeg is the one that should be considered. After all it is a reasonable suggestion, and does not ask for anything more than fair treatment. I read from the brief:
We respectfully suggest that ... if the mandatory language of section 332B be modified to permit the board some discretion which would enable it to relate the intermediate rate to the normal rate as circumstances may warrant, most of our apprehension would be alleviated.
I think that is a fair and reasonable presentation of the point of view of Manitoba, and that it should be given serious consideration here. What purpose will we have achieved if the board of transport commissioners is going to be faced, year after year, with a conflict over something which is now rather hastily written into the act? Surely the opposition that has been developed to section 332B is an indication of conflict in the future unless there is some modification of that particular

section. Modification could surely be made with a view to recognizing the established positions of the provinces concerned.


Mr. Herridge:: Mr. Chairman-


Stanley Howard Knowles: Mr. Chairman-


The Acting Chairman (Mr. Gibson):: The
hon. member for Kootenay West.


Herbert Wilfred Herridge: I must first of all congratulate you on your new office, Mr. Chairman; I am sure you will occupy the chair with grace and dignity, and that you will exercise wisdom and great independence.


Stanley Howard Knowles: As usual.


Herbert Wilfred Herridge: I have risen to speak only briefly because I must say that this question of the mechanics of freight rates is to me a bit of an enigma, and I am not given to speaking on subjects about which I know little. I know the attitude of some of the people of British Columbia towards this section of this bill, and I rise particularly for the purpose of supporting the remarks made by the hon. member for Vancouver South. I am not going to repeat what he said, but I thought he aptly expressed the concern of a considerable number of people in British Columbia over section 332B of this bill. I may also say this. In view of the technical nature of the subject and the great concern of all hon. members for the sections of the country which they directly represent, I think the debate has been carried on at a high and tolerant level and I am pleased to note that fact. I think that has been possible because there is a general recognition that this bill is a particular and first attempt to develop a national freight rates policy.
Again I want to say that I think the hon. member for Vancouver South expressed in excellent language the concern felt by a number of people in British Columbia. I am not sure how this bill affects the people in the eastern portion of the province. I think possibly the people of British Columbia will be affected in various ways, according to the maintenance of the present transcontinental rates. When the minister replies I should like him to give to the committee some assurance that the people of British Columbia can expect the maintenance of the present transcontinental rates about which they are concerned.


Mr. Byrne:: Mr. Chairman, the hon. member who has just taken his seat feels, perhaps as much as I do, that the eastern portion of British Columbia may either be adversely affected by this legislation or be benefited. As a British Columbian I rise to take exception to this clause because I feel that it adversely affects the province of British Columbia. Many of my views have already been expressed by the hon. member for Vancouver South.
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However, some evidence was submitted to the committee which I feel should at this time go into the record.
Section 332A deals exclusively with the question of transcontinental competitive rates. Our understanding of transcontinental competitive rates is that they may be continued only so long as the board of transport commissioners is assured that the railway companies are making a profit, or at least that they are compensatory, and that all commodities hauled at those rates will bring some measure of return to the railways.
Before going further I think it would be well to remind the committee that British Columbia, which contains a fairly large population, is certainly the province that is the greatest distance from the industrial central portion of Canada, and that with commodity and mileage rates we pay an amount greater than that paid by any other province, according to the distance from the central area. That is, if we are 700 miles farther west, we pay that much more on our commodity and) mileage rates. We therefore are at a grave disadvantage in this respect. If the transcontinental rates are to be maintained they must be compensatory, as I have said previously. If the provinces of Alberta and Saskatchewan have been plundered-and some of the members from Alberta have seemed to try to give that impression-a large amount of money must be involved. When the one and one-third rule is applied, there will be a measure of loss to the railways on the transcontinental rates. If there is a loss due to the return under the one and one-third rule, there must be an increase in the transcontinental rates. It is on that basis that we from British Columbia feel there is a grave danger of the transcontinental rates either being abolished or increased. Despite the feeling that is at present abroad in Alberta and Saskatchewan, despite the fact that they feel they are going to receive great benefits from this one and one-third rule, we feel it is quite possible that they will stand to lose as well as British Columbia.
It has been said that many of the briefs we have received are from quarters which we may say have no actual remunerative interest in the question, at least as far as the political aspect is concerned. We have a brief from the Canadian industrial traffic league. This, of course, is in the records of the committee, but I should like to read from it at this time:
Our concern is, primarily, with subsection, 2 (b) of proposed section 332B which would establish a specific maximum to intermediate points over a transcontinental competitive rate. This subsection would, in effect, decree rates by statute, although such rates are not named specifically.

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Then further down:
We strongly recommend to the committee that further study be given to the method of dealing with this problem which has been evolved ini the United States under what is commonly known as "fourth section relief." In brief, as applied to transcontinental rates this requires that the railways make such rates applicable to intermediate points unless the interstate commerce commission grants their application to do otherwise.
If that were written into this section it would provide relief, so that if any rate were found to be non-compensatory it could be appealed to the board, and some measure of assurance could be given that the transcontinental rate would not be lost.
Then the Montreal board of trade, referring to section 332B, says:
As with other shippers, there is no opposition to any effort to provide lower rates to any intermediate points. It is felt, therefore, that the transcontinental competitive rates should have intermediate application but that should the carriers require relief from this intermediate application, then such relief should be effected by application of the carriers to the board of transport commissioners rather than by statute as this section would require.
And then the board of trade of the city of Toronto, with respect to the same section, states:
In such a situation, it is possible that the railways may have to reconsider their position respecting these rates-
That is, competitive transcontinental rates.
-and in that event it is conceivable that they may be forced to cancel the transcontinental rates and probably be compelled also to review the existing system of publishing competitive rates in the light of the possible general effects such legislation may have on these rates.
As I say, that is our fear. However, if the minister can assure us that we are not in immediate danger of losing our preferred position of being a coastal province, and if there is no danger of losing our transcontinental rates, then I am prepared to support this section of the bill.


Stanley Howard Knowles: I feel it is quite significant that this debate is being conducted in the very moderate terms which characterize the speeches being made. This is especially true in view of the sectional interests that seem to be involved. I think that very moderation with which members from different parts of the country are speaking indicates our desire, no matter from what part of the country we may come, to take whatever stand is in the national interest. Furthermore I think it indicates that if from the point of view of any section of the country we feel there is a particular point we have to make, or a particular position we have to put forward, none of us wants to do that to the detriment of any other section.

I believe what I have just said characterizes the remarks of several of those who have spoken just now. Naturally I am particularly interested in the remarks of the hon. member for Winnipeg South Centre, since both of us come from the same area. I agree with pretty well everything be said. I think there may be some slight differences of emphasis I would wish to make, in respect of what I think should be done; but we each appear to have the same approach to the matter. I am sure the committee listened with interest to the statistics the hon. member placed before us concerning the growing industrial activities of our city of Winnipeg and our province of Manitoba. I think hon. members generally will agree that once the life of a community becomes centred around and established upon certain industries, and certain things being done, one should not see those industries disturbed unduly unless there is good cause for such disturbance or appropriate compensation.
I too think the representations made to the special committee on railway legislation by the Manitoba government and those representing the Winnipeg chamber of commerce were likewise moderate. They did, of course, express opposition to the one and one-third rule. I am not so sure I can go that far and say that I would want the one and one-third rule deleted from the bill, because I cannot get over the fact that, to me, it is in the national interest that the advantage that the one and one-third rule will give, particularly to areas such as Saskatchewan and Alberta, should be enjoyed. That is one of the aspects of the approach toward equalization which has been a goal for many years. Nevertheless I do think it is perfectly proper for the people of Winnipeg, and for those of us who represent that area, to look at the effects of that one and one-third rule in so far as it applies to the Winnipeg area.
The hon. member for Winnipeg South Centre has already referred to the brief presented to the committee by the government of Manitoba. I have it before me; and I am thinking in particular of the example given in that brief respecting freight rates on iron and steel products from Hamilton to Winnipeg, and on to Battleford. It was pointed out that the present rate from Hamilton to Winnipeg on steel products is $1.64 and from Winnipeg to Battleford $1.10, or a total of $2.74 for the entire distance if the material is shipped from Hamilton to Winnipeg and then shipped again from Winnipeg to Battleford.
The rate from Hamilton to Edmonton at the present time is $2.91. By making further reference to the Manitoba brief I would point

out that when the one and one-third rule becomes effective, since the transcontinental rate to Vancouver is only $1.48, the rate to Edmonton would be only one and one-third times that, or $1.97. That through rate from Hamilton to Edmonton would thus be less than the combined rate for iron and steel products from Hamilton to Winnipeg and from Winnipeg on to Battleford or Edmonton. As a matter of fact under this new arrangement it would be possible for iron and steel products to be shipped from Hamilton to Edmonton and back to Battleford, cheaper than they could be shipped from Hamilton to Winnipeg and then from Winnipeg to Battleford.
It is precisely that kind of anomaly, that kind of inequality, that equalization is supposed to get away from. I welcome the fact that in many instances this sort of difficulty is being ironed out. That is one of the main purposes of this legislation. But it does seem that Manitoba has made a case to the effect that some new anomalies of this kind may be created for Manitoba by the strict application of the one and one-third rule. I am not one who will ask that Winnipeg or any other part of the country be kept in a protected position. It is my view that when there is an attempt to follow that theory or philosophy the people of the country sooner or later have to pay for it in higher costs.
At the same time I think Winnipeg is perfectly justified in asking that it ought not to be placed in a disadvantageous position, and it does seem to me that something could be done to solve the kind of problem outlined in the Manitoba brief. The hon. member for Winnipeg South Centre in my opinion approached this question in a statesmanlike fashion. If I heard him correctly, it was not suggested that we should put up a fight against the one and one-third rule but that the board of transport commissioners should consider problems of this kind and try to find some way of solving them. The hon. member referred to the request from Winnipeg that the board endeavour to relate intermediate rates to the normal rates.
What interests me even more than that are what are sometimes referred to as in-transit rates. I know this matter was discussed in the special committee only briefly, and the reference to it will be found on pages 143 and 144 of the proceedings of the committee. At that time I believe the chairman suggested that a slight extension of the in-transit rule might solve the problem. The hon. member for Winnipeg South, who was a member of the committee, said that it would not. It came out in the short discussion that took place right then, as I read the evidence, that an extension of the in-transit
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rule might solve the problem but it would have to be not a slight extension but an extension of considerable degree. It seems to me that would offer a solution of the problem.
I understand that the in-transit rule is applied to the shipment of grain. Grain can start from one point as grain, stop somewhere along the way and be milled into flour, and then be shipped on as flour and the rate paid is the through rate for the total distance. It seems to me that would provide an answer to the problem connected with iron and steel products because that is the feature of most concern to Winnipeg. The board of transport commissioners should find some way to make sure that the total rate for two parts of a distance between two points should never be greater than the through rate between those two points. In other words, if the one and one-third rule is going to place a certain maximum on the rate from Hamilton to Battleford, with which I agree, I submit that the rate on iron and steel products from Hamilton to Battleford, even though they are fabricated along the way at Winnipeg, should not be greater than the through rate which would be possible under the one and one-third rule.
I was interested in the discussion that took place a while ago about the job to be done by the board of transport commissioners in implementing the principles and provisions of this bill. I followed with considerable interest the remarks of my colleague, the hon. member for Assiniboia, who pointed out that perhaps the major part of this job would be that to be done by the board of transport commissioners after the bill is passed. I hope I am not being unfair to the minister when I say that I think he agrees with the view expressed by the hon. member for Assiniboia. Although he did not want to answer the question as to how long the job would take, it is clear that this matter of implementing these provisions is of concern to the department.
I should like to ask the Minister of Transport if under the bill as it will now go through it is possible for the board of transport commissioners to extend the in-transit principle in such a manner as to solve the kind of problem I have presented to him, which I have taken directly from the Manitoba brief.


Howard Charles Green: Mr. Chairman, in speaking on section 332B I speak as a member representing British Columbia and not on behalf of my party. It is perfectly clear that in the case of the Liberal party, the Conservative party and the C.C.F. party there are members on both sides of this argument. The question

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involves Manitoba and British Columbia on the one side and Alberta and, to a lesser extent, Saskatchewan on the other. The Social Credit party may think they are in a preferred position in this debate in being all on the one side.
Mr Low: We usually are quite united.


Howard Charles Green: I would point out to them that in recent months they have been very busy wooing the people of British Columbia. There has been a great one-sided love-making affair going on in that province. If they are not careful about the way they go after British Columbia in this debate they may find the people of British Columbia deciding that in effect they are in the position of Little Red Riding Hood with the Social Credit party representing the wolf dressed up in grandmother's cap and spectacles. I must admit that I gained that impression from the hon. member for Bow River when he spoke two nights ago, but today both the leader and deputy leader of the Social Credit party have spoken in a most statesmanlike way and I appreciate the attitude they have taken. In our own party the hon. member for Calgary East has been one of the leaders, ever since he first came here, in placing the position of Alberta before the house.
It is just too bad that this position should have arisen and the four western provinces, of all parts of Canada, placed in two opposite camps. We have had the small end of the stick in so far as freight rates are concerned from the start and nearly all the time these provinces have combined to fight against the injustices in our freight rates structure. Mr. Chairman, there is something about western Canada which I am sure a man of your great intelligence will understand. We are a little different from other Canadians.


Alfred Johnson Brooks: Just a little?


Howard Charles Green: I do not like that laugh from my friend the hon. member for Royal. I know that when the train rolls on to the prairies I always feel that the air is fresher and perhaps a little purer than what we have had to endure in central Canada.


Alfred Johnson Brooks: Much hotter too.


Howard Charles Green: There is a clannishness among the people of the four western provinces which is very worth-while in our Canadian set-up, and I regret that in the argument on this particular section we find ourselves divided.
That division did not start with the members of the house. We all went into the committee believing there was no particular objection to this section, but when we heard

the representations made by the official representatives of the four western provinces we realized that a very difficult question is raised by this particular section. It deals entirely with one group of rates known as transcontinental rates. They are rates which have been established, in effect both east and west, because of the ship competition on the west coast; not only competition from ships carrying goods from eastern Canada through the Panama canal to the Pacific coast, but also ships from abroad. For example there is ship competition from Great Britain with respect to cast iron pipe. Heavy commodities such as cast iron pipe and steel can be carried very easily by ship, and of course can be carried at a low rate.
There can be no doubt that the transcontinental rates are competitive rates. It is true that some of them are very low. For example, the rate on iron pipe is low so the railways can meet the competition of the ships. However, we were told in the committee that there are rates in Ontario and Quebec which are equally low in order to meet truck competition. The point I am trying to make is that these competitive rates to meet carriage by ship are not unduly low. They have been of great benefit to the province of British Columbia because we prefer to get these goods by rail. It is a great deal more advantageous to a businessman to get his supplies by rail because they come a great deal faster than by ship, and there are not the same delays. A ship may have to go to other ports en route, and it is an advantage to be able to get goods by rail.
The transcontinental rates have not only been of benefit to the area or the Pacific coast which includes the cities of Vancouver, Victoria, New Westminster and Prince Rupert, but also to quite a large territory inland from the coast for a distance of approximately one hundred miles. They have been of benefit to the interior of British Columbia because goods transported to the interior get the transcontinental rate plus the rate from Vancouver to the point in question. That is what is known as the back haul, and it is of great benefit to the whole of the interior of British Columbia. It is also of benefit to Alberta cities. Let us take Edmonton, for example. Edmonton gets the benefit of the back haul where there is a transcontinental rate. People there pay the transcontinental rate to Vancouver plus whatever the rate is to carry the goods back from Vancouver to Edmonton. That is cheaper than they would have to pay on a mileage basis coming across

Canada from Ontario or Quebec. I do not believe any hon. member will question that such is the case.
British Columbia is entitled to these transcontinental rates under the laws of Canada as they exist at the present time. That too cannot be denied. On the vast majority of the goods shipped to the west coast we pay the ordinary rates, and we pay the highest rates in Canada. I repeat, we pay the highest rates in Canada on goods coming from eastern Canada with the exception of those few items that are under transcontinental rates. We pay the highest rates also on the great majority of the transcontinental rates. There are only a few of them on which the rate to the coast is lower than the rate to points in Alberta.
Section 331 of the Railway Act contains a code for competitive rates. It sets out what the railways must be able to show if they are to continue a competitive rate. I believe they can bring it into effect without securing the approval of the board but once it has been brought into effect then it can be attacked unless it meets with the requirements set out in section 331. I ask hon. members to look at that section in order to see what those requirements are. Mind you, the competitive rate is lower than the ordinary rates. In the first place it must be shown that competition actually exists. The rate cannot be maintained unless there is competition. Then it must be shown that the rates are compensatory, in other words that the railway is making some money on them. Naturally it will not make as much as it would on the regular rates, but under section 331 the railway cannot carry these goods at a loss under competitive rates. It must also be shown that the rates are not lower than is necessary to meet competition.
These three requirements must be met if the competitive rates are to be kept in effect. Furthermore, such rates are only permissible under our Canadian law where there is competition. They do not apply to intermediate points where there is no competition. Rightly or wrongly it has been the law of Canada that competitive rates would not apply to intermediate points where there was no competition to be met as there is in our case at the coast. There are examples of that right here in Ontario. For example, there is a cheaper rate from Ottawa to Windsor than to London, although the goods go through London on the way. The reason for that is water competition to Windsor and not to London. That evidence was given by the counsel for British Columbia, Mr. Brazier,
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and will be found at page 189 of the proceedings of the committee. He pointed out that the rate from Ottawa to Windsor, a distance of 472 miles by water, is 48 cents. The rate to London, a distance of 362 miles, which is not on the water, is 60 cents; that is 12 cents higher than the rate to Windsor. Another example is on the rate from Toronto to Sault Ste. Marie. Reference to that will be found at page 34 of the proceedings, in the evidence of Mr. Evans, vice-president of the Canadian Pacific Railway. He pointed out that the Canadian Pacific Railway line from Toronto to Sault Ste. Marie is only 439 miles in length. The Canadian National route from Toronto to Sault Ste. Marie is almost double that length, namely 780 miles; yet the rate over both railways is the same because there is the competition. But the points which are on the way to Sault Ste. Marie on the Canadian National Railways line do not get that reduction. They have to pay the regular mileage.
Another feature about the competitive rates which should be borne in mind is that the railways can increase them or abolish them at will. The board of transport commissioners has no power whatever to prevent the railways increasing a competitive rate, or wiping it out completely. Still another feature is that the areas which qualify for competitive rates are entitled to have the benefit of competition. In other words, on the Pacific coast we are entitled to have both the railway facilities and the ship facilities; just as in Ontario, cities where there is truck competition are entitled to have both the railway service and the truck service. Some hon. members suggested in the committee that because we have the ships therefore we do not need to worry about the rail rates, that it was quite right to take away from us any benefit of bringing freight by rail; but where this competitive situation is definitely established, then the area in question is entitled to have the benefit whatever the competition may be.
So much for the background; let us now come to what section 332B does. It adds to the code set out in section 331 for competitive rates, in the case of transcontinental rates only, a provision that the rates to all intermediate points in the prairie provinces cannot be more than one-third greater than the rate to the coast. There is a ceiling written in on competitive rates for the first time in Canada, and it applies to only one part of the competitive rates, namely those which are transcontinental. Furthermore, section 332B does not say that the one and one-third ceiling shall apply only on the

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railway line over which the freight goes- it would not be nearly so objectionable if that were the case-but it defines an area practically from Port Arthur, I think it is, right through to British Columbia. And it says that in that whole area, a thousand miles one way and nearly the same the other, the rate cannot be more than one and one-third the rate to Vancouver.
See what that does. Freight goes to Edmonton, and then it may go 300 or 400 miles north to Waterways or to Grande Prairie in the Peace river country or to Lethbridge down near the United States boundary, and at each of those points the rate must be only one and one-third. That is not the United States system at all. The United States system is that on the line itself the rate must be the same as it is to the coast. They do not take in a huge territory such as has been done in this case.
What is the effect on actual rates? Take canned goods, which are an extreme example because the rate on canned goods is extremely low. It is one of the lowest rates, because ships can put the canned goods in the hold and carry huge quantities of them. I think one ship brought in half a million pounds. I do not remember the figure exactly-we had it in evidence-but it was a huge quantity.
The transcontinental rate to Vancouver and to the coastal territory is $1.57 a hundred pounds. The present rate to Edmonton-if it were on a mileage basis from eastern Canada, it would be $3.23-is only $2.97 because Edmonton gets the benefit of the back haul rate from Vancouver. The rate to Brandon is $2.15. If the one and one-third rule is put in the maximum rate for the whole of the prairie territory will be $2.09, which means that Winnipeg will have to pay just as much to get those canned goods as Waterways will pay away up in northern Alberta. That gives a very clear picture why Manitoba is opposing this section. Incidentally we get a cheap rate on canned goods only in carload lots of 70,000 pounds; in other words a very big car full. On the smaller carload lots of canned goods we pay higher than the rate to Alberta, even on the transcontinental rates. For example, on a carload of 24,000 pounds we pay higher than the rate paid to Alberta.
I hold in my hand a brief submitted by the Vancouver board of trade. They say:
The hoard is much concerned, as also appear to be the railways, that if the commission recommendation, as included in- bill No. 12, is adopted, such losses in revenue would occur to the carriers on traffic to intermediate points that it might be found

necessary by the railways to cancel these transcontinental rates which have been found so beneficial to Vancouver, Victoria, Prince Rupert and other coastal points affected.
An illustration of this rate situation is shown herewith in the transcontinental rate on cast iron pipe from eastern Canada to named Pacific coast points: Group 1, including Vancouver, Victoria, Prince Rupert and New Westminster: $1.12 per 100 pounds.
The minimum car load is 70,000 pounds. There again you have the rate applying only for very large car loads. If you add the 33J per cent to get the rate to intermediate points, it brings it to $1.49 per 100 pounds.
The rate analysis from eastern Canada on this pipe and the estimated loss in revenue to the carriers is indicated to just three stations which are sufficient for the purpose:
They use the round figure of $1.50 instead of $1.49. The present rate to Dawson Creek is $2.61; to Edmonton it is $2.16, and to Saskatoon $1.79. The proposed rate in each case is $1.50. The revenue loss per car load to the carriers amounts to $777 per car load to Dawson Creek, $462 to Edmonton and $203 to Saskatoon. The mileage from Montreal to Dawson Creek is 2,655; to Edmonton, 2,160; to Saskatoon, 1,829. Then the brief goes on:
Should the transcontinental rates be cancelled' the commission plan would' fail as the intermediate points would be assessed present rates and Vancouver and other coast points be penalized. Another important point-the same proposed rate would be authorized to stations with differences in mileage.
I cannot complete my remarks before the dinner recess, but I would point out that the loss in revenue to the railways is not going to come out of the pockets of the railways. It will come out of the shippers or the people in some part of Canada. Do not let any of us believe the railways are going to absorb any of this loss. They do not have to do that.


Solon Earl Low: Which loss?


Howard Charles Green: The loss that is shown in the figures I have just quoted concerning the iron pipe.


Solon Earl Low: They do not show any loss.


Howard Charles Green: I believe this brief does show a substantial loss amounting to $777 On one car load. These losses will have to be paid, and they are not going to be paid by the railway; make no mistake about that.
At 6.15 pun. the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Howard Charles Green: When the committee rose at 6.15 I had been pointing out that section 332B provides that in the intermediate area the freight rates shall not be higher than

one and one-third of the transcontinental rate, and I went on to explain that this provision applies not only to the line of railway over which the goods move but to the whole territory of the prairie provinces and indeed in Ontario as far east as Fort William and Port Arthur. That provision of course brings into the law a new restriction on competitive rates. A new principle is brought into these rates. It covers a large area running hundreds of miles in both directions.
The result is that on some of the goods the freight rate from eastern Canada will be the same to Winnipeg as it is to Saskatoon, Edmonton and as far away as Waterways. That means a new discrimination in our freight rates, because the people of Winnipeg or the people of Brandon will say, quite rightly:	Why should we have to pay for
this freight the same amount paid by a merchant hundreds of miles away in Edmonton or in Waterways? We are therefore not getting away from discrimination. I think a whole new series of complaints about discrimination in freight rates will be initiated if this section is left without some qualifying provision.
We should also remember that all hope of benefit to Alberta or to western Saskatchewan is based on the railways not increasing these transcontinental rates or wiping them out altogether. Any benefit that is going to come to this intermediate area disappears if the railways see fit to raise the transcontinental rates. The foundation for any relief given by section 332B rests on our transcontinental rates to the Pacific coast.


John Horne Blackmore: Will the hon. gentleman permit a question?


Howard Charles Green: Yes.


John Horne Blackmore: I realize that the hon. member is starting on a most valuable discourse. I should like to have him define for us what he means by discrimination. I ask that question as a matter of clarification, not in order to embarrass the hon. gentleman.


Howard Charles Green: I thought I had explained that point. Under this new plan the rate on canned goods, for example, or on cast iron, will be just as high to Winnipeg as it is to Saskatoon, Edmonton or Waterways, because the one and one-third ceiling clamps down on the rates all over the whole of the prairie area. I am afraid that will mean there will be complaints from Manitoba-as we have already heard today-on the ground that they should not have to pay for their freight the same as the people who live farther west. They will try to break down this rate, because they will not be able to understand why they
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should have to pay say $2 per hundred pounds when the man in Edmonton or Waterways is paying only the same amount. The effect goes further than that, because under these rates a wholesaler in Edmonton will be able to buy goods and ship them back half way to Winnipeg and put the Winnipeg merchant out of business.


Solon Earl Low: Not outside of his own area.


Howard Charles Green: Oh, yes. This changes the whole distribution area, because the rate to Edmonton will be exactly the same as the rate to Winnipeg. The Edmonton merchant could therefore ship goods half way to Winnipeg and beat out the Winnipeg man, although the goods have come through Winnipeg to get to Edmonton.


Solon Earl Low: Do we not have to look at the consumers' angle also? That is a highly important thing, it seems to me.


Howard Charles Green: The whole benefit is based on the transcontinental rates remaining untouched; and of course that is where British Columbia begins to worry. We should foe delighted to see Alberta get all the benefits possible, but we are afraid that as a result of this plan the transcontinental rates will be wiped out on some goods, or will foe increased. If that happens, Alberta will get no benefit and we will foe penalized. That is the picture.
Then I come to what the railways are likely to do. It must foe remembered that the railways are free to wipe out these transcontinental rates without the board of transport commissioners being able to prevent that action. The vice-president of the. Canadian Pacific Railway gave us figures as to the amount of freight that is involved both in the prairie area and in British Columbia. It is estimated that in the course of the year 1949, under these rates, on goods shipped to British Columbia the C.P.R. earned a total of approximately $1,500,000. On the other hand goods were shipped to the prairie provinces earning in freight the amount of $15,500,000 which might be affected if this new plan is put into effect. That means that on the prairies the amount of freight revenue in danger is ten times that which would be earned in British Columbia by maintaining the transcontinental rates to the coast. As Mr, Evans said, the railways simply will not take that loss. They need not take it because they can increase our transcontinental rates, and it is only human nature to take that step in order to prevent the loss. On that point he is reported at page 43 of the proceedings of the committee as follows:
I submit if it is enacted-

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Referring to this section 332B.
-it may result in a breakdown of the entire rate structure, may cause substantial losses in revenue to the railways and may lead to a defeat of its purpose because it will not any longer be possible to maintain the same low basis of transcontinental rates to meet this competition.
That is, to meet the competition by ships. Mr. O'Donnell, counsel for the Canadian National Railways, was examined and at page 202 will be found his answers to questions I asked about getting a guarantee that the transcontinental rate would not be increased. I said:
Would you give us any undertaking that the transcontinental rates would not go up?
I meant if this section becomes law. He replied:
We could give no undertaking in that regard with respect to any particular rate.


Mr. Cleaver:: Would the hon. member mind reading the rest of the paragraph?


Howard Charles Green: He continued:
I think you have to take it for granted that the railways are out to get all the business they can, even business that they can get on a basis that will make a contribution to their overhead, not necessarily a profit, but a contribution to their overhead; they are going to take it, they will take anything that is going to make money for them.
Now, if the railways decide to make the transcontinental rate high enough so they will not have to lower their rates to intermediate points, and particularly to Edmonton, by reason of this section 332B, the result to British Columbia will be that we will have an increase on approximately 63 per cent of the items which are carried west under this present transcontinental rate. Those figures were furnished to me by the economic expert for the government of British Columbia.
An even more objectionable feature is that in the future the railways will be very reluctant to put in a new transcontinental rate. Here they are faced with a ceiling of one and one-third to apply over the whole area, to practically every station in the prairie provinces, and they will hesitate to put in any new transcontinental rates.
Other areas in Canada are not being treated in that way. They have no such restrictions. Ontario and Quebec receive great benefit from the competitive rates in these two provinces. They receive a great deal more benefit than British Columbia receives from the transcontinental rates. Yet there is no ceiling written on the competitive rates in Ontario and Quebec. If the law of this land is to be that the rates to intermediate points in competitive tariffs must not be more than one and one-third times the rate to the points of competition, then surely it would

only be fair that the rule should apply across the nation and not only to the transcontinental rates.
Some mention was made this afternoon of the origin of this new plan. It came out in evidence before the committee that the provinces had no opportunity to argue it before the royal commission. Apparently the commission got that suggestion from someone-I think from one of their technical men- and it was brought down in the report without the provinces concerned having had the opportunity to point out what the result would be. I think the royal commission did excellent work, but on this one point they should certainly have given the provinces affected an opportunity to come in and be heard, rather than make a recommendation without its having been given full consideration.
I have great sympathy for Alberta. Frankly,
I do not think Saskatchewan is so much concerned. My understanding is that the east half of Saskatchewan will be hurt by the new section, but the west half will be benefited. I repeat, I have great sympathy for Alberta. That province and my own province of British Columbia have more in common than any other two provinces in Canada. I would hope that in the years ahead they will be able to work together very closely. If we do that, then those two provinces will constitute almost an empire.
In my opinion, however, this problem can be met in another way. I believe section 331, dealing with competitive rates, could be amended by putting in that section a provision that where the rate to an intermediate point is over one and one-third the board of transport commissioners will have power to consider whether or not that rate is fair and reasonable. If it were not reasonable, then they would be able to prohibit it, they would be able to cut it down.
There are only a few items causing all this trouble. It is not as though hundreds of freight items were concerned. I believe those causing the serious trouble are the four or five listed in the report of the royal commission. There may be some additional ones, but Mr. O'Donnell said there would not be more than twenty. In order to bring about a fair rate situation with regard to those twenty items, surely the proper way would be to give the board jurisdiction to deal with them, rather than to write an entirely new principle into our law governing competitive rates and restrict that new principle entirely to the transcontinental rates which are beneficial to British Columbia.

Some of these twenty odd items are of great importance in British Columbia. Included, for example, are iron and steel items. If that were not the case I do not suppose there would be much objection to letting it go. But they do enter into our economy to a very large degree, and we have to ask that there be no restriction placed upon the transportation of those goods, such as we believe would follow from section 332B.
That section is out of place in this bill. Here we have a new national freight rates policy. This section does not fit in with that new policy, because it opens the door to new types of discrimination. It is also outside the policy for competitive rates as laid down in the Railway Act. I am afraid it is going to start a lot of fresh trouble out in western Canada, and that is something which certainly should be avoided.
I had intended to quote from some of the briefs filed, but I shall conclude by reading from only one or two of them. The first of these is the brief from the board of trade of Toronto. I would point out that the provincial governments of both Manitoba and British Columbia are opposing this section. Here we have the brief from the board of trade of Toronto, which says:
Section 332B (2a) Maximum tolls to or from intermediate territory.
This board questions the advisability of establishing in statutory form the conditions set forth in this proposed amendment. The railways, in our opinion, should be free to meet any competition actual or potential to Pacific coast points without being obligated to reduce their rates on such traffic to intermediate territory. It is only by their freedom of action to meet such competition that the railways can protect their revenues and at the same time assist Canadian suppliers to meet foreign competition to Pacific coast territory. In its conclusions on the subject of competitive rates generally, the royal commission says on page 86:
"The railways should neither be denied the right to meet competition, nor, when once they have decided to publish competitive tolls in one area, be forced by law to apply these same tolls to other regions where competition between transportation agencies is non-existent."
It is a matter of record that the transcontinental competitive rates have been established only because the railways were faced with competition actual or potential. It is therefore reasonable to conclude that if the railways are to be compelled to extend the benefits of these competitive rates to points where competition is not involved a principle will have been established which it is feared would have a marked influence on the future publication of such rates. Certainly it is difficult to imagine the railways being willing to publish or maintain rates on a competitive basis to the Pacific coast if they were compelled by statute to depress their rates on the same commodities to inland and prairie points where the competition did not exist. In such a situation, it is possible that the railways may have to reconsider their position respecting these rates and in that event it is conceivable that they may be forced to cancel the transcontinental rates and probably be compelled also to review the existing
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system of publishing competitive rates in the light of the possible general effects such legislation may have on these rates.
I think that sums up the situation very neatly. I would hope that the minister would give the section further consideration and possibly agree to an amendment which would give the board power to review any of these rates which are over one and one-third and cut them down to that figure if they are found to be unreasonable.
There are nearly two million people in British Columbia and Manitoba, and about the same number in Saskatchewan and Alberta, and I doubt the wisdom of adopting a policy on which there is such a wide difference of opinion. It cannot be good legislation when there are such large blocks of people who will be dissatisfied. For that reason alone I submit that the government is unwise to force through section 33 2B in the form in which it is now found in the bill.


Lionel Chevrier: Mr. Chairman, I want to refer immediately to the moderation with which this section of the bill has been discussed this afternoon and evening. I want also to thank and commend hon. members for the manner in which they have received this bill. There has been almost unanimous acceptance of it, perhaps with the exception of section 332B, to which the hon. member for Vancouver-Quadra and those who have joined with him have objected. I want to tell the committee that it is a matter of deep satisfaction to me and I am sure to the government that the recommendations of the royal commission on transportation which they have attempted to implement by way of legislation have found such favour.
I hope the hon. member for Vancouver-Quadra will accept the remarks I am about to make in the spirit in which they are made. I want to assure him that anything I have to say on section 332B is made in that same spirit. His moderation in debate has been such that I would not want him to think for a moment that anything I have to say is said in any other than the same way. But I think the hon. member and those who are associated with him have not only overstated the case, they have exaggerated it. I believe when the hon. member comes to place it in its proper perspective he will find that it does not mean anything like he thinks it means. I am sure that at one stage he must have thought exactly as I do at the moment.
My reason for saying that is that in the freight classification there are about 14,000 items and only 2,000 of those move under the transcontinental tariff. This means that immediately 12,000 items are eliminated from the provisions of this section. Of the remaining 2,000 items there are barely nineteen that

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could have any effect upon the position as placed on Hansard by the hon. member for Vancouver-Quadra. A moment ago he placed on the record some figures which would indicate, to use his words, that there would be an increase of 63 per cent in the rates on freight carried west under transcontinental rates.
I challenge that statement; I say that statement is not correct. I have in my hand a statement that has been prepared for me by the same expert and adviser who gave evidence before the royal commission and who was heard by the committee. I am sure that the manner in which he gave his evidence found favour with hon. members. This statement indicates that of a total of nineteen items moving under the transcontinental rate and which may be affected by section 3326, ten of them clear it and therefore will not be affected at all. For instance, the rate on automobiles to the coast is $8.98 per hundred pounds. If you apply the one and one-third rule the rate will be $11.94. The present rate to Calgary and to Edmonton is $7.37, so there is no application at all. The same goes for confectionery and furniture. In the case of furniture, the rate to the coast is $4.57; if you take the one and one-third rule it is $6.08. The present rate to Calgary is $3.79.


Howard Charles Green: I was referring to the items
which will be affected, whereas the minister is referring to items which will not be affected.


Lionel Chevrier: I am coming to those. I
am proceeding by process of elimination. I want to show that of these nineteen items there are at least ten which will not be affected because they are clear. If my hon. friend will allow me, I should like to give some further items. For instance, the rate on hardware to the coast is $3.07; under the rule of one and one-third the rate would be $4.08; the present rate to Calgary is $3.23. The rate on canned goods to the coast is $1.57; if you apply the one and one-third rule the rate is $2.09, whereas the present rate to Calgary, which is a combination of the Vancouver rate, is $2.99.
I come now to the items which might-not which will-be affected, as I shall attempt to explain later on, by the one and one-third rule. The first is chemicals and drugs, which I do not think is serious and which I shall leave for the moment. Then come the iron and steel items. On iron and steel for construction the rate is $1.48; plus the one and one-third rule it is $1.97; the rate to Calgary is $2.64. That may be affected. Iron and steel of a general nature comes under a rate to the coast of $1.98; plus the

one and one-third rule the rate is $2.63; the rate to Calgary is $2.91. Paper and print will be affected, and so will soap, wire, syrup, starch, pipe fittings. There are nine articles.


Mr. Harkness:: Has the minister the figures with respect to barbed wire?


Lionel Chevrier: Yes.


Douglas Scott Harkness: Would you mind giving
them?


Lionel Chevrier: The rate on wire to the
coast is $1.48. If you apply the one and one-third rule it is $1.97. The present rate to Calgary is $3.23. Therefore there will be these nine items which might be affected by the one and one-third rule.


Howard Charles Green: I think there are other items
which are not affected so much.


Lionel Chevrier: Yes, there are other items
which are not affected so much, but the point I am coming to is this. Assume that those articles are serious, and I do not admit that. Assume further that the railways, because they are serious, withdraw them. Then is there not still competition by ship?


Howard Charles Green: But we should not be put in
that position.


Lionel Chevrier: Wait a minute. Assume that there is no competition by ship. Is there not still competition by the United States railways? Is there not still competition into the back door of Vancouver by the Great Northern? Does anyone in this house think for a moment that the railways are going to allow this traffic to go to the United States railways? Of course they are not. What did counsel for the Canadian National Railways say? He said that in so far as the Canadian National Railways were concerned they had no intention of withdrawing the rate. I cannot speak for the Canadian Pacific Railway; neither can I speak for the Canadian National for that matter, but I will let counsel speak because he put on record what his views were. While I cannot speak for the Canadian Pacific Railway I will be a very surprised man if the Canadian Pacific withdraws any of the transcontinental rates-


Howard Charles Green: I certainly hope you are right.


Lionel Chevrier: -in so far as that section is concerned. Therefore the worst possible thing that could happen would be that there would be no steamship competition and no competition from the United States railways. That would be the worst possible event that could happen. I do not think it will, but suppose it did? Then what would take place? The railways would quote a special commodity rate which, as witnesses said before the committee,

would be slightly higher than the rate existing at the moment. That is the worst that could happen so far as British Columbia is concerned.
Opposed to that there are advantages to British Columbia by virtue of the one and one-third rule because the transcontinental rate applies to port areas on the coast, and therefore I maintain that the whole eastern half and the whole northern part of British Columbia will benefit by virtue of the one and one-third rule. My hon. friend shakes his head, but that is the advice I have received.


Howard Charles Green: That is not what the British Columbia government say.


Lionel Chevrier: I will come to that too. That is certainly what the royal commission on transportation recommended. Opposed to that position which I have expressed as being perhaps the worst that could be envisaged by British Columbia, and which I do not think will ever happen, there is the other problem, which has affected Alberta and a large portion of Saskatchewan for many years, namely the problem of unfair discrimination. It is one that is covered by section 314 of the Railway Act and one which could be remedied by an amendment to that section or by the section that we have sought to introduce under this bill. Subsection 5 of section 314 of the Railway Act provides in effect that there shall not be a greater charge for a shorter haul than for a longer haul, and an exception is made by the board because of the fact that this is a competitive rate.
Alberta has been suffering from discrimination for a number of years. They have been complaining about that discrimination, and on this point let me meet the argument of my hon. friend when he says he regrets that the provinces are divided amongst themselves with reference to section 332B. Let me answer him in this way. How much more would the provinces be divided if this bill were not made law? That is why the bill is brought down; because the royal commission, after having gone into the complaints, came to the conclusion that there were geographic, economic and climatic disadvantages being suffered by the extremities of this country. They sought to remedy them by the recommendations they made and which have been carried forward into the bill. My hon. friend says the provinces will be divided. I do not think they will. As a matter of fact, in answer to the hon. member for Winnipeg South Centre, when counsel for the province of Manitoba was asked by me whether or not he would prefer to have this bill or to have section 332 out and no bill at all he said: Of course we would much rather have this bill; and that goes for all the provinces.
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Gordon Minto Churchill: That is hardly a fair question.


Lionel Chevrier: Of course it is.


Gordon Minto Churchill: Not "either/or" on the whole bill.


Lionel Chevrier: The point is this. Let me tell my hon. friend that if we did not have this bill all the things that Manitoba, Saskatchewan and Alberta have been complaining about over the years would not be remedied. All the provinces would go back before the board of transport commissioners under the circumstances as they were before, and the board would have its hands tied by judicial judgments handed down over the years. There would be no remedy at all for the present position. For the last forty-seven years the board of transport commissioners has been trying to remedy this position and could not do so because it did not have the power. We in this parliament decided that we would have a royal commission to investigate their complaints. After all, we must be logical. Did we not say to the provinces in effect-and when I say "we" I mean the government- all right; you want a royal commission, but you will have to take the bitter with the sweet. I am not admitting there is anything bitter in this bill. I do not think there is. With all due respect to my hon. friend-


Howard Charles Green: Surely it was never the position that the provinces had to take whatever the royal commission chose to bring in without any opportunity to protest and ask for something else. That is making the royal commission almost godlike. Nobody thought they were that.


Lionel Chevrier: No. I agree with my hon. friend that nobody thought they were that, but I think it might be interesting if I were to read to the house something that is contained in the brief of the premiers of the provinces to the government, and this is an entirely different citation from the one I put on the record before. I place this one on the record because it has particular reference to the problem under discussion now. Here is what the brief said at one point:
In our opinion the only satisfactory way in which this problem can be met is by the appointment of a royal commission under the public inquiries act. The differences between the views of the seven provinces and the view of the federal government in this matter are not fundamental differences in any matter of principle.
The dominion government feels that there should be a further inquiry into this matter. The seven provinces are unanimously of the same mind. The only question between us is as to the body which should conduct the inquiry and we feel that a royal commission can perform this duty with greater satisfaction than can the board of railway commissioners. We give the following reasons in support of our view:
(a) With wide powers of reference enabling it to inquire into all railway problems of the country

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as they exist in either a geographic or an economic sense with full power to recommend any amendment to existing legislation or as to the constitution, powers and duties of the regulatory body, it can do much to promote a greater sense of national and regional security in the dominion. We feel an opportunity should be given to the provinces to make recommendations with regard to the terms of reference of the royal commission.
(b) If the commission is composed of men of ability with an urge to inquiry constructively for solutions to problems now vexatious and pressing, such a commission could without spending too much time in hearing evidence arrive at conclusions calculated to advance the general welfare.
And we proceeded-


Howard Charles Green: Surely the minister is not suggesting that the provinces bound themselves by that request to accept whatever recommendations the commission saw fit to bring down.


Lionel Chevrier: No, I am not arguing that, but my hon. friend will see in a moment what I am coming to. This brief was read by one of the premiers, and at the end of the brief is to be found this addendum:
The submission which I make has the unanimous assent and approval of the premiers of Nova Scotia, New Brunswick, Prince Edward Island, Manitoba, Saskatchewan, Alberta, and British Columbia. The premier of British Columbia is unable to be here today because of the demands of his own legislative session; but he was with us all day Saturday, on which day the proposals that I have outlined were discussed and agreed to by the seven premiers. I am authorized by Premier Johnson of British Columbia to say that, joining with the other provinces in the proposals now submitted, the premier of the province of British Columbia thinks it proper that it be made known to the dominion cabinet that the province of British Columbia had, prior to the judgment of the board, taken appropriate steps toward the filing of applications with the board of transport commissioners for the approval of the mountain differential, and intends to proceed thereon with all due diligence.
The province of British Columbia did proceed with the application to the board for the removal of the mountain differential, and the board granted the application. My hon. friend says: "Surely you are not arguing that the provinces are bound by these recommendations." I am not arguing that, but what I am arguing is that the provinces wanted the royal commission and in effect said: "There is no difference of opinion between us in principle. The only difference of opinion is that you want an investigation under P.C. 1487; we want a royal commission. Give us a royal commission and also let us assist you on the terms of reference." We have done that. Could we go any further than we have gone? Having read the report, having studied the report, having examined the conclusions, we adopted them. The hon. member for Vancouver-Quadra was also of the view that these recommendations were good. He was not only of the view that they were good-and now I refer to section 332B

-but that they should be brought down and implemented at the earliest opportunity. The hon. member for Vancouver-Quadra made a lengthy speech when I dealt with the recommendations on the report of the royal commission in the house-and a very good speech it was-which indicated that he had studied the report of the royal commission very carefully. He dealt with many of the recommendations therein contained, and he dealt in an especial manner with section 332B. I am sure he will not object if I read to the committee what he said then. This was his statement on April 5, 1951.' It can be found at page 1649 of Hansard:
Another subject which Is also of great importance and which likewise calls for an amendment to the Railway Act is that of transcontinental rates. They are dealt with at page 96 of the report, and I refer particularly to page 101 where it is stated;
"The Railway Act should be amended to provide that when the competitive transcontinental tariffs are published by the railways, such tariffs shall contain a provision that the rates to or from intermediate territory shall not exceed the transcontinental rates by more than one-third."
As I understand it, the meaning of that recommendation is this. There are certain special transcontinental rates, for example, from Toronto and Montreal to Vancouver. They are only in effect because there is competition by sea and we benefit by those rates on the west coast. I presume there is also a similar benefit from transcontinental rates on the east coast. But the Canadians who live in the interior part of the country-for example, in interior British Columbia, in Alberta and, I suppose, in Saskatchewan as well-do not get any benefits from those transcontinental rates. They must pay a much higher rate. The commission has recommended that the higher rate that they pay in the interior portions of the country shall not be more than one-third higher than the transcontinental rates. I believe that that provision, if it became law, would be of great benefit to those Canadians who are not privileged to live at the seashore. I hope that the government will bring in an amendment to the Railway Act at this session to make that change possible as well.


Howard Charles Green: I am sure the minister would not want to be unfair. If he will remember, I said this afternoon that none of us had realized the defects in this measure until we heard the evidence in the committee. I quite admit that is what I said when we had the first review of the commission's report, but I made it perfectly clear this afternoon that when we got into the committee hearing evidence and realized just what the change did it altered the situation completely from my point of view.


Lionel Chevrier: I am not going to press the point, and I do not want to embarrass my hon. friend.


Howard Charles Green: Oh, I am not embarrassed.


Lionel Chevrier: But I do want to say that when he made the statement-


Howard Charles Green: I did not know as much then as I know now.


Lionel Chevrier: When, he made the statement it was several months after the report had been tabled, and he had had an opportunity to study it. I think he has been fair in his-


Howard Charles Green: We had had the report only a few weeks.


Lionel Chevrier: No; I think the report was tabled in March. However, I may be mistaken. This statement was made on April 5. I will not pursue it any further because I do not want to be unfair to the hon. gentleman. There is no doubt about it, he has had a change of mind, whether or not it is because of the evidence in the committee. I suppose if he rises in his place and says it is because of that I as a member of parliament must accept his statement. Since he has said it, I do accept his statement, but I think nevertheless he has been influenced by that evidence in a manner other than which the evidence indicated, because my understanding of the evidence is not at all that of my hon. friend. And during the whole of this discussion, not only in the committee but in the house, it was said repeatedly by many hon. members that this is a very technical thing; it is a difficult thing to understand; we are not freight rate experts, and the like. Above all I certainly would subscribe to that position. I am not a freight rate expert. I have been dealing with this subject now for two or three years, and I do not profess to know a great deal about it, certainly not any more than the ordinary member of the house does. But the point I am trying to make now is that we picked out a group of experts. We picked out men whom we thought-


Howard Charles Green: The minister is not suggesting that the members of the royal commission were railway experts.


Lionel Chevrier: I am suggesting that the members of the royal commission were men qualified to deal with this problem. I am suggesting that the members of the royal commission were exactly what this parliament wanted, and they had assigned to them the best experts they could have in this country, either in traffic, accountancy or otherwise. If there was a body competent to deal with it, it was the royal commission on transportation. What did they do? They listened carefully to all the evidence, and they recommended this one and one-third rule.


Howard Charles Green: They did not listen to anything in connection with this section.


Lionel Chevrier: The hon. member for Winnipeg South Centre says this rule was never discussed. He asks about the origin of this new plan, because the provinces had no
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opportunity of discussing this recommendation. But did the provinces have any opportunity of discussing the other recommendations contained in this report? Certainly the provinces made no recommendations similar to those found in section 332A; they made no recommendations in so far as the uniform rate structure is concerned, which is found in this bill. Where did that come from? Did that come out of the sky? It came from the study given to the problem by the members of the royal commission, and the advice and assistance they got from the experts. The same thing can be said about the one and one-third rule.
I believe that if hon. members will read the chapter dealing with transcontinental rates they will find a clear explanation of the reason a great injustice would ensue if the province of Alberta and a portion of Saskatchewan were not given the benefit of this one and one-third rule. The report goes on to say that no great hardship, if any at all, will ensue to the province of British Columbia. I could quote that chapter at length, but I shall not do that. If hon. members will read the conclusions at the bottom of page 99 of the royal commission report, together with the five or six paragraphs to be found on page 100, they will find what the commission recommended in so far as the one and one-third rule is concerned.
Then my hon. friends suggest we should amend section 331 in order to give the board authority to deal with the one and one-third rule. But that would not meet the position in Alberta. Alberta is faced with section 314, subsection 5, of the Railway Act which, because of the competitive transcontinental rate to the coast, puts that province in an unfair discriminatory position. The way to remedy that is not by amending section 331, but by a new section in the bill. If I were to accept the suggestion made by the hon. member it would interfere with the right of the railways to establish competitive rates. After all, the competitive rate is one which the railways file with the board of transport commissioners. If an amendment were made to section 331 it would interfere with a right which they already have. All through their report the royal commission say there should be no interference with the competitive rate position of the railways.
I have been much longer than I intended to be. I hope I have not been unfair to my hon. friend. I have tried not to be.


Howard Charles Green: A great many more hon. members feel as I do.


Lionel Chevrier: That may be.


Howard Charles Green: Including some on that side of the house.

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Lionel Chevrier: I directed my remarks to the hon. member principally because he carried on the debate in the committee. In so far as the hon. members on this side of the house are concerned, they have made their position quite clear. With reference to the hon. members for the Kootenays, it is my view-it is only a personal opinion-that they are not hurt but rather are helped by this one and one-third rule. However, I may be wrong in that. I conclude by saying that I believe the case for the province of British Columbia has been overstated. I do not believe the position will be nearly as serious as suggested by the hon. member for Vancouver-Quadra. In any event my feeling is, as the royal commission says in its report, that because of steamship competition which exists and the railway competition from the United States side of the border, the railways will not withdraw the transcontinental rate as some expect. I believe this bill is a good one. I believe this section is a good one, because in the national interest I am sure even my hon. friend would not want to deprive a large region of this country of an advantage gained under this bill, which would not come to that region were it not for the one and one-third rule. In effect I am saying that I cannot accept the suggestion of my hon. friend. I say it regretfully, and I say it respectfully. I believe it is a good bill, and I hope it will be possible for us to get on with it now.


Gordon Minto Churchill: I should like to ask the minister if he would care to comment upon Manitoba's position with regard to industry, particularly steel. Is he leaving us with the assumption that Manitoba's argument is unanswerable?


Lionel Chevrier: On that point, Mr. Chairman, all I can say is what I have already indicated in my earlier remarks, and what I said in the committee. When I asked counsel for Manitoba whether or not he would be willing to accept this bill as it was or have no bill with section 332B and go before the board of transport commissioners in the same position he was in earlier, he replied he would much rather have this bill.


Howard Charles Green: That is like asking whether you have stopped beating your wife.


Lionel Chevrier: That is the best answer I can give.


Stanley Howard Knowles: In connection with the situation in Manitoba, I should like to repeat a question that I put earlier today. Before I do so may I say again that I believe, in the national interest, this bill is a good bill and I support it. In fact I go further and say I support the one and one-third rule. One of the purposes of that one and one-third rule
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is to do what is suggested on page 100 of the royal commission report, namely, eliminate to a substantial degree some of the anomalies that have been created. But if the application of that rule creates a new anomaly of the kind I cited this afternoon in quoting from the Manitoba brief, are not we from Winnipeg justified in asking the minister if there is not some way in which that new anomaly can be solved? In particular, I should like to know whether it would be possible, under the provisions of this bill, for the board of transport commissioners to consider in-transit rates for steel and iron products moving through Winnipeg?


Lionel Chevrier: The answer to that, Mr. Chairman, is that the commission dealt with in-transit or stop-off rates in a special chapter, and came to the conclusion that it would not begin to answer the problems of Alberta and Saskatchewan. They recommended against it. If my hon. friend will look at page 113 of the commission's report, he will find a chapter or a section of a chapter dealing with stop-off privileges. The conclusion reached by the royal commission is as follows:
The reasons for the establishment of stop-off (or in-transit) privileges are stated above, and it must be borne in mind that these privileges are concessions made by the railways.
To carry out the proposal suggested by Alberta would lead to the introduction of claims for further stop-off privileges on the grounds of analogy to existing cases and in turn to reductions of revenue to the railways. It is presumed that the railways are competent to determine what stop-off privileges are in their interests and it would be dangerous to permit the board to compel them to act against their interests and to commit them to indefinite losses.


Stanley Howard Knowles: I do not wish to prolong this discussion indefinitely, but after all those of us who were not on the committee are at a bit of a disadvantage in comparison with those who were. It seems to me, however, that what the royal commission was saying on that point was that an extension of the stop-off privilege or the in-transit rate would not be as happy a solution to the problem facing Alberta and Saskatchewan as would be something like the one and one-third rule; and I agree. My point is that the one and one-third rule-which has been brought in to solve the problem for Alberta and Saskatchewan, and which has been brought in in the national interest-good and all as it is, has created this new anomaly. I do not feel that the answer given to the Alberta case should be regarded as ruling out the possibility of considering it for Manitoba, particularly in respect of the steel industry.
Section 7-section 332B-agreed to.
Sections 8 to 17 inclusive agreed to.

On section 18-Payments to railway companies for cost of maintenance.


Howard Charles Green: Will the minister explain the amendment to section 18, and tell us just how this section will be applied?


Lionel Chevrier: Section 18 is the subsidy section having to do with the payment of $7 million to both railways. By virtue of subsection 1 (a) the Canadian Pacific Railway Company is to receive the full annual cost of maintaining 552 miles of trackage, subject to subsection 4, if the total cost for both railways exceeds $7 million. By virtue of subsection 1 (b) the Canadian National Railway is to receive the full annual cost of maintaining 552 miles of trackage out of the total trackage involved of 985 miles, subject also to the provisions of subsection 4. By virtue of subsection 2 the board of transport commissioners is to determine what actual trackage is to be used, which would mean that it would fix the actual trackage to be included, such as the main track, the passing track, the siding, the yards and the like. The board is also to determine, by virtue of this section the annual cost to each for the trackage so determined and for inclusion in the scope of the payment.
These payments should be for the purpose of reducing to that extent the freight rates applying between eastern and western Canada, and the amendment which has been added indicates how the board is to proceed. The total amount payable shall be applied to a reduction of the relative level of rates applying on freight traffic moving 'in both directions between points in eastern Canada and points in western Canada over the trackage to which the payment relates, in such manner as the board may allow or direct. In effect the board of transport commissioners, which is the body dealing with these rates, will determine the coverage as to tracks applying to both railways, and will also determine the manner in which this $7 million shall be apportioned.


Hazen Robert Argue: The $7 million provision in this section should result in some benefits to the people of the prairies and to the long haul shippers. It has been stated over and over again that the provinces of Ontario and Quebec have certain natural advantages in the way of truck and water competition which result in low competitive rates for the people in this area:	The long haul shipper, even
though the rates may be equalized, needs something more; and that something more, as suggested by the royal commission, is this $7 million to pay the cost of maintenance of the trackage over the railway bridge between east and west.
Railway Act
We should bear in mind first of all the fact that this amount is only $7 million; and unless the $7 million is guarded carefully this provision may not result-if certain other things are done-in any benefit whatsoever to western Canada. Up until now freight rates have been set on the basis of using the financial position of the Canadian Pacific Railway as a yardstick. One of the important items in that C.P.R. yardstick was that freight rates should be of such an order as to provide the C.P.R. with a surplus of $15 million. I note that at the present time there is a move on foot by the C.P.R. to get the $15 million surplus in the C.P.R. formula increased to a figure of between $27 million and $29 million. If the C.P.R. can get the formula changed so that in future freight rates are set so as to give it a surplus of $29 million instead of a surplus of $15 million, there will have to be an increase in freight rates to the extent of $52 million; and on the basis of estimates made in the past the total cost of changing the C.P.R. surplus from $15 million to $29 million would amount to some $30 million for freight users in western Canada.
All I am saying is this. If, a few days after we are given the $7 million to maintain the trackage over that bridge, we are called upon to pay another $30 million in freight rates in order to provide more money to the C.P.R., it would have been better for the government to keep the $7 million and not spend it, and not to have made this provision in the bill, if at the same time the government would prevent this proposed change in the C.P.R. formula. I want the $7 million, but I want it to be effective in bringing down the rates for the freight users in western Canada. It will not be effective if, after the government provides the $7 million, a change is granted by the board of transport commissioners in the C.P.R. formula on which freight rates are based, in order to provide the C.P.R. with more money at a cost of $30 million to the freight users in western Canada.
We want equalized freight rates; but the advantages of equalized freight rates will be small indeed if they are increased by the suggested new formula. I do not know whether the minister is prepared to comment on the argument I have made. But I can say to him that I hope, I trust, the government will see to it that the Canadian Pacific formula is not changed, because that would result in taking away all the benefits of the $7 million, and impose an additional burden on western Canada.


[Stage Direction]
Section agreed to.
Bill reported.
1464	HOUSE OF
Canadian National-Canadian Pacific Act
Mr. Speaker:: When shall the bill be read the third time?


Howard Charles Green: Next sitting.



CANADIAN NATIONAL-CANADIAN PACIFIC ACT REPORT TO PARLIAMENT TO GIVE INFORMATION CONCERNING CO-OPERATIVE PROJECTS

Lionel Chevrier: that the house go into committee to consider Bill No. 6, to amend the Canadian National-Canadian Pacific Act, 1933.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
On section 1-Contents of report to parliament.


James MacKerras Macdonnell: Mr. Chairman, at the resolution stage, before the bill was sent to committee, it was pointed out that it was of a simple nature. The committee evidently regarded it as such, because they passed it without discussion. However, could the minister make some brief comments as to the subject matter of the bill which, when the legislation was originally introduced in 1932, was considered very important. Those were bleak days so far as railway traffic was concerned. Perhaps the minister would make some brief comments as to the extent to which co-operation does exist today. We all know there are such things as pool trains, but there may be some other trains with which we are not familiar.


Lionel Chevrier: Mr. Chairman, I would be glad to do that. One of the complaints made by the provinces when they presented their brief to the government was that the Canadian National-Canadian Pacific Act, which was passed to ensure greater co-operation between the railways, was not effective.
The complaint was that there were a number of instances where, in the minds of the provinces, there should have been co-operation but such co-operation had not followed. In the light of that complaint by the provinces the government decided to include a reference in the terms of the royal commission as to whether or not there had been the desired co-operation between the two railways. The royal commission deals with the subject matter in a rather comprehensive chapter, which is chapter 8 of the report.
In that part of the report, which I am sure my hon. friend has read, the commission recommends the changes now found in this bill. It came to the conclusion that perhaps it would be a good thing if there were placed in the anuual report of the Canadian National Railways certain requirements which the railways would have to give to the committee
[Mr. Argued

on railways and shipping, and which that committee would be in a position to study and to investigate. It could then be decided whether or not there was the desired degree of co-operation and, too, it could be ascertained whether in certain cases there could not be a greater degree of co-operation. I think the manner in which the royal commission has recommended the amendments to the act is good, because it gives parliament a chance to learn whether or not co-operation really exists.
That, I believe, is the effect of Bill No. 6.


James MacKerras Macdonnell: How extensive are these instances of co-operation? Do they occur in every province? Those of us who live in Ottawa know such a condition exists in the service between Toronto and Montreal, and Toronto and Ottawa. Is that co-operation widespread throughout the dominion?


Lionel Chevrier: I can pick out of the air one
or two instances. For instance, both railways operate the Northern Alberta railway. There is co-operation there. Both railways operate the Vancouver hotel. There is co-operation there. There is some co-operation, too, in certain parts of the maritimes in respect of some of the lines running into those provinces. Then my hon. friend knows of the co-operation between the two railways in their service from Montreal to Toronto, which has been going on for many years. It may be that it is desirable to extend this condition. In order to come to a sound conclusion one would have to hear what both railways have to say.


James MacKerras Macdonnell: Could the minister tell us of any case where co-operation has been discussed but no conclusion arrived at?


Lionel Chevrier: I do not know of any at the
moment.


Winfield Chester Scott McLure: May I ask the minister if, when the railway committee meets, it will have the report before it. In Other years the report of the Canadian National Railways has been presented two or three days before the meeting of the committee, with the result that there has been insufficient time to look into the affairs of the company. Then may I ask if we will have separate divisional reports? For instance I should like to know whether the Prince Edward Island division is operating at a profit or otherwise. It would seem that under section 14A some changes are to be made. Why not at the same time give us a break-down of what each division is actually earning?


Lionel Chevrier: The report of the Canadian National Railways will be in the same form

in which it has always been. While the information my hon. friend wishes to have is not in the report, it is always obtainable from the railway officers.


Winfield Chester Scott McLure: It is difficult to get that information from any of the officers of the Canadian National Railways. I have tried for the last three or four years to get some idea along this line, but I have not been able to.


Lionel Chevrier: What I should have said is that the information, in so far as the Atlantic region is concerned, is obtainable. It may not be divided as between Prince Edward Island, Newfoundland, New Brunswick and Nova Scotia; but the information for the Atlantic region has been given from year to year.


James MacKerras Macdonnell: In section 14A(e), after referring to co-operative projects being studied by the National company and the Pacific company, and such other information as appears to the directors necessary, we find these words: "or as may be required from time to time by the governor in council." Are those words put in merely as a sort of protection or do they indicate some definite project of inquiry by the government?


Lionel Chevrier: They do not indicate any definite project of inquiry at this time but there may well be some instance in the future when it will be necessary to ask the co-operation of the railroads.


Stanley Howard Knowles: On what basis is the revenue divided in the case of pool trains operated by the Canadian National and Canadian Pacific?


Lionel Chevrier: I am afraid I am not prepared to answer that question on this bill. That is a question which the directors of the railroads and their officials would be competent to answer when before the committee.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.


Lionel Chevrier: that the house go into committee on Bill No. 7, to amend the Maritime Freight Rates Act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
On section 1-Westbound rail and lake traffic.


Winfield Chester Scott McLure: I suppose the minister will be making a full statement on this bill?
Maritime Freight Rates Act


Lionel Chevrier: I shall try to make the statement as full as possible. This is simply an amendment to carry out the recommendations of the royal commission. It legalizes a practice which has existed over the years of giving the benefit of the 20 per cent preference not only to rail traffic moving in the direction referred to in the act but also to rail and lake and rail-lake-rail traffic. For instance, it would cover movements to western Canada via the great lakes.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.


Hon. J. J. McCann (Minister of National Revenue) moved: the second reading of Bill No. 28, to amend an act to amend the Canada-United States of America Tax Convention Act, 1943, and the Canada-United States of America Tax Convention Act, 1944.
He said: Parliament recently approved the supplementary income tax convention with the United States of America which amended the income tax convention which had existed since March 4, 1942. The supplementary convention was approved by chapter 27 of the statutes of 1950. The protocol which has now been added to the supplementary convention accepts on the part of the government of Canada the reservation which was made by the government of the United States, on the advice of its Senate, to the effect that paragraph 2 of article VII of the original convention as amended by article I (d) of the supplementary convention should be deleted. Article VII reads:
1.	A resident of Canada shall be exempt from United States income tax upon compensation for labour or personal services performed within the United States of America if he conforms to either of the following conditions:
(a) He is temporarily present within the United States of America for a period or periods not exceeding a total of one hundred and eighty-three days during the taxable year and such compensation
(A)	is received for labour or personal services performed as an employee of, or under contract with, a resident corporation or other entity of Canada and
(B)	does not exceed $5,000 in the aggregate during such taxable year; or (b) he is temporarily present in the United States of America for a period or periods not exceeding a total of ninety days during the taxable year and the compensation received for such services does not exceed $1,500 in the aggregate during such taxable year.
2.	The provisions of paragraph 1 (a) of this article shall have no application to ihe professional earnings of such individuals as actors, artists, musicians and professional athletes.

146$
Canada-U.S.A. Tax Convention Acts
The one hundred and eighty-three days referred to do not have to be consecutive. In its reservation to the ratification of the convention the government of the United States did not accept the provision which restricted the article dealing with compensation for personal services in the case of actors, artists, musicians and athletes. That is one point being dealt with in this amendment.
Article VII, which I have just quoted, provided that a resident of Canada would be exempt from United States tax upon compensation for personal or professional services performed within the United States if he was present therein for less than one hundred and eighty-three days during the year and met certain conditions as to the residence of his employer or the amount received for his personal services, which I have indicated would be less than $5,000.
An exemption with respect to the application of this provision was made with respect to the professional earnings of such individuals as actors, artists, musicians and professional athletes. The United States senate committee which examined the convention considered that this restriction embodied a discriminatory principle which the committee could not accept. This bill will confirm the government of Canada's acceptance of that same reservation and will remove the restriction relating to actors, artists, musicians and athletes. The result will be that actors, artists, musicians and athletes from one country receiving remuneration for services performed in the other country will be treated for income tax purposes in the same way as commercial travellers, professional men, and others. The provisions are reciprocal and apply to Canadians who receive remuneration for services performed in the United States and to United States residents who receive remuneration for services performed in Canada. If you will look at the bill you will see that the only words added to section 1 are "and protocol". The section will read:
The convention and protocol entered into between Canada and the United States of America, set out in schedule A-
That is the schedule at the back of the bill.
-is approved and declared to have the force of law in Canada, and shall be deemed to be included in and to form part of the convention and protocol set out in the schedule to the Canada-United States of America Tax Convention Act, 1943.


James MacKerras Macdonnell: I have nothing more to add until the bill goes to committee.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
[Mr McCann.]
On section 1-Convention and protocol approved.
James MacKerras Macdonnell: I want to be clear as to what the minister said. Would he read again the part where he referred to the nature of the employment of the person? Was there a reference to being an employee of a Canadian corporation?


James Joseph McCann: What I quoted from the statute?


James MacKerras Macdonnell: Yes.


James Joseph McCann: It starts with article VI A which reads:
"Pensions (including government pensions) and life annuities derived from within one of the contracting states by a resident of the other contracting state shall be exempt from taxation in the former state."
(d) By amending article VII to read as follows:
"1. A resident of Canada shall be exempt from United States tax upon compensation for personal (including professional) services performed during the taxable year within the United States of America if he is present therein for a period or periods not exceeding a total of 183 days during the taxable year and either of the following conditions is met . . ."
Then paragraph (b) reads:
His compensation received for such personal services does not exceed $5,000.
Then it continues:
The provisions ... of this article shall have no application to the professional earnings of such individuals as actors, artists, musicians and professional athletes.
That was the original. The Senate of the United States objected to that, and if you will look at the protocol contained in the schedule to the bill you will see that it reads:
As recited in the ratification on the part of the United States of America, the Senate of the United States of America, in its resolution of September 17, 1951, advising and consenting to the ratification of the supplementary convention aforesaid, expressed a certain reservation with respect thereto, as follows:
"The government of the United States of America does not accept paragraph 2 of article VII, as amended by article I (d) of the supplementing convention, relating to professional earnings of individuals such as actors, artists, musicians and athletes."
They do not accept it and we have agreed not to accept it. That is what constitutes the protocol.


James MacKerras Macdonnell: I understand that, and I think that is clear, but I think the minister omitted reading subsection (a). Would he read that?


James Joseph McCann: The first condition is:
(a) His compensation is received for such personal services performed as an officer or employee of a resident or corporation or other entity of Canada . . .

We have nothing to do with that at all. They accept that part of it but the second part they do not accept.


Stanley Howard Knowles: May I ask a question in order to get it clear? I understand that as the convention now stands the provisions of the section which the minister read a moment ago do not apply to actors, artists, musicians and athletes.


James Joseph McCann: That is right.


Stanley Howard Knowles: And that exception is being removed by this protocol and convention?


James Joseph McCann: That is all there is to it.


Stanley Howard Knowles: That means that from now on the article will apply to these people.


James Joseph McCann: From here on these people will be taxable the same as anybody else.


Stanley Howard Knowles: And previously-


James Joseph McCann: They had an exemption under certain conditions, that they were earning less than $5,000 and that they were not in the other country more than one hundred and eighty-three days.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Schedule agreed to.
Bill reported, read the third time and passed.


Hon. Alphonse Fournier (for the Minister of Justice) moved: that the house go into committee to consider the following resolution:
That it is expedient to present a measure to amend the Judges Act. 1946, to increase the number of county court judges in British Columbia from fourteen to fifteen.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Howard Charles Green: Will someone explain what this is all about?


Alphonse Fournier: I am informed that the British Columbia government has requested this further appointment to the county court. It was investigated by the officials of the Department of Justice and they believe this extra appointment is needed for the good administration of justice in British Columbia.


Howard Charles Green: Can the minister say in which district this additional judge is to be appointed?
94699-S4
Judges Act


Alphonse Fournier: That is in the bill, but if I am not mistaken it is New Westminster.


Howard Charles Green: There have been press reports to the effect that it would be in New Westminster, and if that is so-


Alphonse Fournier: Perhaps I read it in
the press myself.


James MacKerras Macdonnell: Bring the press in.


Howard Charles Green: I do not know how we would get along without the press. If that is the district, it is very timely that an additional judge should be appointed. There is a greatly increased amount of business going through that particular registry, and it is a very wise thing to provide for the appointment of an additional judge.


Alphonse Fournier: I wish to express my appreciation to the hon. member. I believe it is in New Westminster. I thank him very much for the praise he has just given us on this appointment.


Stanley Howard Knowles: It is clear, is it, that the bill does nothing else than provide for this increase in the number of judges?


Alphonse Fournier: To the best of my knowledge that is right.
Resolution reported, read the second time and concurred in.
Mr. Fournier, Hull (for Mr. Garson) thereupon moved for leave to introduce Bill No. 29, to amend the Judges Act, 1946.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the bill be read the second time?


Stanley Howard Knowles: Next sitting.



BUSINESS OF THE HOUSE

Alphonse Fournier: I move the adjournment of the house. Tomorrow we will take up third reading of Bill No. 12, to amend the Railway Act; third reading of Bill No. 24, to amend the Public Printing and Stationery Act. I understand that a copy of all information requested by the hon. member for Greenwood will be handed to him tomorrow morning or sometime before the house opens.


Stanley Howard Knowles: I thought it was understood it would be laid on the table so other members could see it as well.


Alphonse Fournier: If there is any objection-I am told there is an existing copy of all these details-it could be tabled tomorrow.

Business of the House


James MacKerras Macdonnell: The minister is quite a magician if that is the arrangement. I understood that the information was to be given to me on Monday morning, but if the minister has changed all that-


Alphonse Fournier: I cannot recall exactly the date I mentioned, but during the week I was told they were preparing all this information and I was told tonight that they would have the copies in the morning and it would be laid on the table or handed to the hon. member. If there is any objection I will not call third reading tomorrow.


James MacKerras Macdonnell: I would be obliged if the minister would do that. The minister will recall that we let second reading go through on this understanding. There are so many committees tomorrow morning that I will not have time to see it if it is available.


Alphonse Fournier: I will try to have the information tabled tomorrow morning and we will not have third reading tomorrow. We will postpone it.
Then we will take up Bill No. 27, to amend the Pension Act; then the bill based on the resolution which was just passed unanimously, increasing the number of county court judges in British Columbia. Following that we have two resolutions of the Minister of Justice to amend the Supreme Court Act to increase the salary of the registrar, and to amend the Exchequer Court Act to increase the maximum salary of the registrar. Then we have a resolution in the name of the Secretary of State to amend the Civil Service Act in respect of the tenure of office and salaries of the commissioners, and a further one to amend the Dominion Elections Act.
Motion agreed to and the house adjourned at 9.45 p.m.

Friday, November 30, 1951